CWC reports net profit of USD951m in FY2014

21 May 2014

UK-based Cable & Wireless Communications (CWC) has posted a 4% year-on-year decline in revenue from its continuing operations to USD1.873 billion in the twelve months to end-March 2014, while it revealed that mobile turnover increased only marginally as strong mobile data growth was offset by falling fixed voice and enterprise, data and other revenues. Meanwhile, group EBITDA reached USD608 million, a 5% improvement on the USD581 million reported in FY2013; CWC noted that the disposals of its Macau business (USD807 million), the majority of its islands businesses (USD501 million) and its 55% stake in Monaco Telecom (USD445 million) have resulted in reduction in the pro-forma net debt to USD205 million. CWC’s capital expenditure, meanwhile, reached USD306 million, up by 16% year-on-year, mainly due to investments in high-speed LTE mobile networks in the Cayman Islands and the Bahamas, as well as deploying fibre optic networks in Barbados and the Cayman Islands. The group reported operating profit of USD95 million for the period under review, down 48% on the USD184 million reported in the year to end-March 2013, mainly due to an exceptional expense of USD241 million in relation to redundancy payments, as 36% of the workforce in the Caribbean, or 1,240 employees, exited the group during FY2014. Net profit for the twelve months under review totalled USD951 million, significantly higher than the USD170 million reported in end-March 2013, following gains from disposals of discontinued operations.

In operational terms, CWC reported a consolidated mobile customer base of 3.7 million subscribers, up 9% from 3.39 million at end-March 2013, while fixed users decreased by 2% y-o-y to 1.089 million. Broadband access lines increased 6% in the period under review to reach 388,000.

Meanwhile, following its successful disposal programme, CWC has completed a strategic review of the business, and in order to support its strategic imperatives, the company has launched a new investment programme, called Project Marlin, which will see an additional USD250 million invested over the next three years.

Commenting on the results, CWC chief executive officer Phil Bentley said: ‘We have an established presence in the business-to-business (B2B) and business-to-government (B2G) segments which we will seek to expand. Most valuably, we have the largest on- and off-island network reach of all operators in our markets, allowing us to provide the full range of telecoms services that our customers desire. But, what is also clear is that the business is trading below its full potential. Although the rate of decline in fixed line voice is slowing, growth in our broadband and TV offer has been disappointing and our cost base remains uncompetitive. We have therefore developed a new strategic plan to drive top line growth, reversing our historical revenue decline, to leverage our existing networks enhanced by the USD250 million increased investment of Project Marlin; and to drive further operating efficiencies across the portfolio.’

Bahamas, Barbados, Cayman Islands, Monaco, United Kingdom, Cable & Wireless Communications (CWC),

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