Cable Bahamas mobile build-out stalls profits
Telecoms company Cable Bahamas Limited posted a net loss of Bah$15 million for its first quarter ended September, quadrupling the bleed reported in the comparative period in 2016.
Head of finance, Kino Williamson, said the result was expected because of the continued build-out of operations to support the cable television company's foray into the mobile market.
"It was such an aggressive build-out that we've reached the point where we are covering 98 per cent of the population. After getting our first subscriber in November 2016 we are now at a little over 30 per cent of the market," Williamson said.
Nassau-based Cable Bahamas listed two preference stocks on the Jamaica Stock Exchange last year, after raising capital in private placements on the local market, mostly from pension funds.
With the new investment, the 23-year-old company is now triple play service provider through subsidiaries Revoice for mobile, RevTV for cable and Revon for Internet. Williamson said it was the expenditure on the start up of Revoice that led to further compression of the company's bottom line.
"When compared to prior years, we didn't have the subsidiary and we knew that in the early stages we would be incurring losses as we grow," Williamson said.
Cable Bahamas grew revenue by Bah$7 million in the quarter, but expenses grew by Bah$10 million to wipe out the gains.
The company made a net loss of Bah$4.12 million in 2016, and a loss of Bah$15.2 million in the 2017 period. It anticipates more losses in the periods ahead.
"We had anticipated that it would be this way, and ... we are looking at another 18 or so months before we turn the corner and become profitable," Williamson said.
Within that period, the Cable Bahamas expects to capture up to half of the US$300 million mobile telephony market, saying it was a critical part of its growth strategy.
"We are trying to within the next two or three years be at 50 per cent of the market. The trend is making us optimistic since in 13 months we have managed to come this far, so we'll keep pushing along as hard as we have been doing," Williamson said.