Digicel warns of COVID-19 impact after promising results in previous quarter

8 Jul 2020

Digicel Group has warned its creditors that it expects the Coronavirus pandemic to have a ‘significant impact’ on its earning for the current quarter, the Irish Times reports, citing market sources. According to the paper, the debt-laden pan-Caribbean telco had booked a 5% year-on-year increase in EBITDA for the year to end-March 2020 to around USD1 billion – the first such increase since 2014 – supported by revenue growth in the fourth quarter of that year. The three-months to end-March 2020 saw a 1% quarter-on-quarter increase in revenue, with improvements in turnover from data services (up 8% q-o-q), home entertainment (6%) and business solutions (8%). For the full year, however, service revenue declined by 1% to around USD2.2 billion, including a roughly USD95 million hit from foreign currency movements.

Meanwhile, the group confirmed to bondholders that it has now completed its complicated debt restructuring programme – which had seen bondholders write off around USD1.6 billion by exchanging their bonds for securities of a lesser value – reducing its debt pile to around USD5.8 billion. The exchange was not entirely successful, however. Whilst holders of four of the five categories of bond targeted by the scheme accepted the proposals, take-up was below 10% for USD925 million of bonds due for repayment in 2023, which Digicel had largely sought to delay until 2025.

Jamaica, Digicel Group