Digicel clarifies revenue performance
- Reports strong profit growth, 11.5m subscriber base
Digicel Group Limited, a provider of mobile and data storage services, has clarified its report on the performance of its revenues, saying two markets have been stripped from its reporting of group results.
Last year, Digicel reported turnover of about US$2.15 billion, which it broke out as US$1.75 billion from Caribbean and Central American markets and about US$400 million from the Pacific operations.
On Monday, the telecoms reported that total revenue rose to US$2.23 billion in the period ending March 2011.
On the face of it, the numbers represent a 3.72 per cent improvement. Digicel, however, reported strong gains of 27 per cent.
"With subscribers up 6 per cent to 11.5 million across all 32 markets, revenues for Digicel Group Limited were up 27 per cent to US$2.23 billion, with EBITDA margins solid at 43 per cent following the successful integration of the Pacific," said the initial release, referencing all of the telecoms' markets, including those in Central America.
On Tuesday, Digicel Group spokeswoman Antonia Graham clarified in a short telephone interview, and later by email, that this year's results do not include income from operations in Honduras and Panama, in which group ownership amounts to 44 per cent, and are now being reported on separately.
She said the 27 per cent was calculated from a base of US$1.74 billion; and not the US$2.15 billion of revenue reported the previous year.
"Last year's headline revenue numbers included the revenues for all Digicel markets, including Digicel Pacific Limited, which was a sister company until 31 March 2010," said Graham via email.
"Digicel Pacific Limited was acquired by Digicel Group Limited on 1 April 2010 - hence the revenues of Digicel Pacific Limited are now fully consolidated with Digicel Group Limited."
The acquisition was valued at US$825 million.
"We are only disclosing revenues for Digicel Group Ltd — which this year comprises Caribbean, El Salvador and Pacific post the acquisition of Pacific on 1 April 2010 ... . The relevant comparative for Digicel Group Limited is US$2.23b this year versus US$1.74b for last year - 27 per cent increase - these are the numbers for Digicel Group Limited; these are the numbers you should use," said Graham, the group head of public relations.
"Anything else would not be accurate."
The privately owned company does not disclose net profit, but Graham said "there was a US$175 million improvement" in its bottom line at yearend March 2011.
Jamaica, which is one of the group's top markets and its base of operation, grew subscriber numbers by two per cent to remain at just over two million subscribers, said the PR head - which would amount to less than 40,000 new customers. The Irish Times reports that Digicel, which is selling its Honduras and El Salvador businesses to America Movil and buying its Claro Jamaican operation, expects to net no more than about 40,000 additional subscribers from the acquisition.
Digicel claims that it now has 25 per cent of the broadband market and that penetration of that market has increased from 17 per cent to 20 per cent since the launch of its 4G service in September 2010. More broadly, Digicel said revenue from its data segment grew by 105 per cent and now accounts for 15 per cent of service revenue.
Digicel's 11.5 million subscribers across 32 markets is up 6.5 per cent from 10.8 million in the previous year. Growth was strongest in its Haitian market, which added 400,000 new subscribers, Digicel said.
The telecoms and partner Scotiabank recently won the 2011 Global Telecoms Business Innovation Award for the mobile banking product 'Tcho Tcho'.
Its earnings before interest taxes depreciaton and amortisation, EBITDA, jumped by 27 per cent, from US$753 million to US$954 million, Digicel said.
"All of our markets have made a contribution to our reported profits - clearly our larger markets like Haiti," added Graham.
"Jamaica, Papua New Guinea and Trinidad would contribute a larger share."
The telecoms is US$4.6 billion in debt, according to disclosures by Fitch ratings agency, which recently released a positive report on the company.
Digicel said it had US$600 million of cash reserves and is bullish about the future.
"We are optimistic in terms of our outlook for next year. We are continuing to invest in expanding our business in Haiti and Papua New Guinea and in selective rollout of 4G — based on HSPA+ — in several markets," said Graham.