Sun | Oct 25, 2020

$50-billion haul for Flow Jamaica

Published:Sunday | March 1, 2020 | 12:11 AM
A banner is displayed at the Flow Jamaica headquaters in Kingston. The company produced more revenue for the Liberty Group in 2019.
A banner is displayed at the Flow Jamaica headquaters in Kingston. The company produced more revenue for the Liberty Group in 2019.

Although Cable & Wireless Communications, CWC, has seen a decline in some of its big markets, the gains made by Jamaica and other have contributed to stronger earnings for the group.

Cable &Wireless Jamaica, which trades as Flow, generated US$383 million, ($50 billion), in annual revenue for its financial year ending December 2019.

That’s six per cent more than the US$363 million earned a year earlier.

Management attributed the revenue gain to increased subscribers but did not speak to the impact of price increases on select services implemented during the year.

Flow Jamaica falls under CWC’s regional network, which is owned by the Liberty communications group.

Other Caribbean territories reporting increased revenue for the year included Trinidad and Curacao. The net effect for the region was record results.

“[It was] our best results since acquisition of C&W since the second quarter of 2016,” Chris Noyes, the chief financial officer for Liberty Latin America, said on an investor call last week.

For 2020, Liberty forecasts low single-digit growth in revenue and operating cash flow for the regional Cable & Wireless operation.

The leading territory in the C&W chain remains Panama but that market continues to suffer from competition. Its revenue slipped to US$580 million from US$597 million a year earlier.

Bahamas, another market affected by competition, recorded a dip in revenue from US$229 million to US$207 million.

The level of operating cash flow generated for each market was not disclosed.

Liberty Latin America remains in acquisitive mode at a time when other telecoms in the region are pulling back.

Last year, Telefonica exited Central America and now plans to sell the bulk of its South American operations this year, with the exception of Brazil. Last year, Digicel entered deals to sell and lease back a portion of its cell towers.

During that period, Liberty Latin America announced plans to acquire AT&T’s operations in Puerto Rico and US Virgin Islands for nearly US$2 billion. That deal should be completed later this year.

“We are looking for opportunities organically in the region. We are knowledgeable on the assets for sale in the region, but we will be smart about this, because we are disciplined on mergers and acquisition opportunities,” said Balan Nair, CEO of Liberty Latin America on the investor call. “It has to earn free cash flow per share. Our goal is not to get better, but to create value,” he said.

When asked about the Telefonica assets by a Barclays analyst, Nair declined to confirm plans to acquire them.

“If you are referring to the Telefonica announcement, then we do not comment on mergers and acquisitions. But it would be silly for us not to be hanging around the hoop for any potential opportunities to grow inorganically in the region. That is probably all I should say,” he said.

steven.jackson@gleanerjm.com