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C&WJamaica strengthens operations, but still has second worse loss-making year

Published:Friday | June 5, 2015 | 12:00 AMMcPherse Thompson
Garfield ‘Garry’ Sinclair, CEO of LIME Jamaica.

Cable & Wireless Jamaica (C&WJ) Limited and its subsidiaries have recorded revenues of $21.59 billion for the year to March 2015, a 17 per cent annual increase, buoyed by growth in its mobile and broadband businesses.

The telecoms has also recorded operating profit of $1.64 billion and a net loss of almost $9.18 billion for the year ending March 2015.

It's the second largest net loss reported by the company, following the record $20-billion bleed in 2012 that was precipitated by a massive asset write-off. Then the company's asset base deflated from $36 billion to $20 billion.

This year, too, C&W J is reporting one-off costs of close to $7 billion, including a $3.7- billion write-down of assets that have been replaced under its upgrading programme, as well as duplicated assets identified under the ongoing merger with the Columbus/Flow operations. The other $3.3 billion of charges relate to restructuring and legal fees.

The telecoms currently trades as LIME Jamaica but will shed that identify and adopt the Flow brand once the companies amalgamate their operations.

The company had a solid 15 per cent increase in mobile subscribers, which drove mobile revenue growth of 30 per cent.

The broadband segment also experience revenue growth of 16 per cent due to a 12 per cent increase in subscribers, driven by the positive performance of its browse-and- talk product.

Additionally, LIME boasted its strongest EBITDA performance yet at $4.2 billion, almost doubling last year's previous high of $2.8 billion. EBITDA, or 'earnings before interest taxes depreciation and amortisations', is a key metric for measuring the health of telecoms, which are usually subject to asset write-downs as technology goes obsolete.

"Our 2014-15 results reflect a fundamental movement in our commercial and financial position," said Chief Executive Officer Garfield Sinclair. The results demonstrated "excellence in execution" he said.

C&WJ said its strategic partnership with Chinese manufacturer Huawei for supplies of low-cost Y330 smartphones resulted in the introduction of more than 100,000 customers to mobile Internet and the handset becoming "smartphone of the year" among local gadget buffs.

During the year, the company's mobile network upgrade and expansion project was synchronised with the steady increase in data subscribers as it deployed the superfast HSPA+ technology to support more people.

At the same time, C&WJ said, it was busy enhancing the fixed voice component of its broadband connectivity strategy by doubling the number of weekly browse and talk installations to keep up with increasing demand in rural areas.

To supplement the growth in geographic demand, a member of the London-based Cable and Wireless Communications group acquired the shares of the parent company of Dekal Wireless Jamaica Limited, which will be operated by LIME Jamaica.

C&WJ said that Dekal, based in Port Antonio, Portland, is Jamaica's first and most robust islandwide wireless Internet service provider, with more than 70 per cent geographic coverage.

"All of these formidable Internet accessibility options - now under one roof - is supporting Jamaica's goal to deepen Internet penetration within the shortest time possible, strengthening our ability to grow revenues and market share in the very near future," Sinclair said.

The Jamaican telecoms closed its financial year with assets of $29 billion, a gain of $5 billion, even while its balance sheet has weakened. It now owes its parent almost $46 billion, while its equity has fallen deeper into negative territory to $33 billion from $24 billion a year ago.