Fri | Aug 17, 2018

Flow Jamaica losses double

Published:Friday | March 3, 2017 | 12:00 AMSteven Jackson
Garfield Sinclair, Managing Director of C&WJ/Flow Jamaica.

Cable & Wireless Jamaica (C&WJ), which trades as Flow, posted net losses of $667 million on revenues of $6.8 billion in its third quarter ending December 2016, which reversed the profit earned in that period a year earlier.

Over nine months, the company made a net loss of $1.56 billion, or more than double the $644 million loss recorded a year earlier.

Flow had better performance at the top line, where sales revenue grew 12 per cent to $19.2 billion, due to increased mobile revenues as its subscriber base expanded. But heavy finance expenses, at $4.3 billion, wiped out its $2.9 billion in operating profit, after exceptional items, over nine months.

Flow Jamaica Managing Director Garfield Sinclair said the mobile segment grew by 25 per cent. The segment delivered $9.7 billion in revenue, while mobile subscribers increased by nine per cent.

Flow Jamaica counts active customers using a 90-day marker, which puts its estimate at over one million; but new parent company Liberty Global defines active as 30 days, which puts the telecoms' subscriber base at more than 900,000.

Flow also reported that mobile data subscribers rose 24 per cent year-on-year, while mobile data revenues improved by 46 per cent.

Broadband revenues at $2.06 billion benefited from less churn, but the customer base remained flat. Fixed-voice service revenues hit $5.08 billion and actually grew revenues by four per cent.

During the quarter, C&WJ presented its financials to conform with the adjustment of its financial year end to conform with that of its ultimate parent, Liberty. Its year end has now switched from March to December.

In the presentation of the financials, the audited nine-month results ending December 2016 have therefore been compared with the audited 12-month results ending March 2016.

The company posted $144 million net profit in the December 2015 quarter, its first quarterly net profit in nine years. That quarterly profit came at a time when Liberty Global was in the process of acquiring C&WJ's parent company, Cable & Wireless Communications Plc.

For the year ending March 2016, the company made a profit of $1.16 billion.

Under Sinclair's leadership, C&WJ's market share and stock price have increased with the stock at $1.69 on Tuesday. But its balance sheet remains under water.

C&WJ's net deficit was $29.9 billion at December 2016 due in part to its continued losses. The Jamaican company now owes its parent more than $55 billion, under a loan facility that has a credit limit of $60 billion, while its assets amount to $39 billion.