Caribbean unit drags down CWC’s full year results

26 May 2011

UK-based telecoms group Cable & Wireless Communications (CWC) cited difficult market conditions at its Caribbean operations as a potential factor that could affect its financial results in the near future, but noted that stronger performances by its other subsidiaries had helped to shore up earnings in its 2010/11 fiscal year. Group revenue for the twelve months ended 31 March 2011 was up 4% year-on-year at USD2.44 billion, which the company said reflected a ‘very strong performance’ at its Macau unit, which reported a 19% annual increase in turnover to USD377 million, attributed to increased enterprise activity and strong mobile voice sales in the country. By comparison, with CWC noting that is sees ‘limited near-term prospects of material economic recovery’ in the Caribbean, the local unit reported turnover of USD850 million in FY2010/11, down 3% y-o-y from the USD873 million it generated a year earlier. Group earnings before interest, tax, depreciation and amortisation (EBITDA) meanwhile were broadly flat, rising by 1% to USD872 million, with operations in the Caribbean once again dragging down results; in FY2010/11 the Caribbean unit reported EBITDA of USD229 million, 15% lower than in the previous financial year. Net profit for the twelve-month period was USD344 million, up from USD263 million a year earlier, which CWC said reflected the lower level of exceptional costs and a gain related to the disposal of its Bermudan subsidiary.

Commenting on the results, Tony Rice, CWC chief executive, said: ‘Since demerger in March 2010 we have made good progress on our strategy … All four of our business units are doing the right things to position themselves for the future and to advance our vision of delivering world class communications to local markets … We also made initial steps to reshape the Group, disposing of our operations in Bermuda and adding to our Caribbean business with the purchase of a majority shareholding in the Bahamas Telecommunications Company (BTC). Both transactions show our commitment to reshape the portfolio.’

United Kingdom, Cable & Wireless Communications (CWC, incl. Columbus Int.)