Revenues at Denis O'Brien's telecoms group Digicel, which has operations in the Caribbean, Central America and the south Pacific, were flat in the first quarter of its financial year while its losses widened due to a sharp increase in the cost of servicing its debt
Documents seen by The Irish Times show that Digicel Group Ltd's revenues were flat at $678 million (€535 million) in the three months to the end of June, the first quarter of the group's financial year. Its net loss widened to $49.3 million in the quarter from $10.8 million in the same period of 2013 due to higher finance costs.
Interest costs on its debts rose to $185 million in the first quarter from $144 million in the previous year. Its earnings before interest, tax, depreciation and amortisation (Ebitda) was unchanged at just more than $290 million.
The results also show a dividend of $10 million was paid in the quarter, the same as a year earlier. Mr O’Brien, who owns close to 100 per cent of the business, will have received nearly all of this payment.
Tax charge
Digicel’s tax charge was unchanged at $49 million. Its cash balances reduced to $768 million at the end of June from $1.1 billion a year earlier. The group’s long-term debt widened to $5.8 billion at the end of June from $5.4 billion. This primarily reflects an additional $500 million in loan notes issued in December 2013.
Digicel increased its customer numbers to 13.3 million at the end of June from 12.9 million a year earlier.
The results also state that “significant progress” has been made in the rollout of its telecoms towers in Burma, where the company had bid unsuccessfully for a mobile licence. By the end of June, construction had started on 628 towers while subsequent to the quarter end, its tenant, Ooredoo, launched its wireless services in the country. Digicel provided $22 million in the first quarter for its Burma operation.
The results show local currency depreciation against the dollar affected revenues in Jamaica, Haiti and Papua New Guinea. Reduced mobile termination rates in Jamaica and El Salvador "negatively impacted" service revenues by $4.5 million. In Jamaica, revenues declined by 11 per cent to $100 million while in Haiti they fell by 5 per cent to $118 million. The biggest percentage drop was recorded in El Salvador, with a 12 per cent decline to $26 million.
French West Indies
The Jamaican dollar depreciated by 10 per cent year-on-year, resulting in a $9 million reduction in Digicel’s revenues, which are reported in US dollars. However, an appreciation in the value of the euro versus the dollar helped to increase the company’s revenues in French West Indies by 6 per cent to $48 million.
The group’s average revenues per user fell by 6 per cent to $15.3 in the quarter.
The results state that in July Digicel announced it had agreed to acquire a cable and fibre network in Jamaica from Telstar Cable. This fourth cable acquisition in a number of months increases its reach to six Caribbean markets.
