As the Cable & Wireless worldwide operations strive to adjust to changes in market forces and consumer demand, the group has been undergoing changes. Within the Caribbean region, stiff completion and tight economies as well as changes in the way people communicate have forced changes in their businesses in the region.
In an effort to improve results for the future, Cable & Wireless Caribbean incurred net exceptional items (excluding impairments) of US$50 million relating to redundancy and restructuring programmes in the Caribbean. The prior year charge of US$66 million was primarily in respect of restructuring activities in The Bahamas and Panama.
What about Jamaica? | Cable & Wireless Caribbean incurred US$26 million as an exceptional charge for cash payouts for redundancy and restructuring programmes. This charge was related to Jamaica and the eastern Caribbean but our calculations suggest that the bulk relates to Jamaica. Cable & Wireless Jamaica had indicated that it was making 300 persons redundant earlier this year and outsourcing the field force technician services to Erickson. The redundancy charge will wipe out any hope that may have existed for the Jamaican operation to return to profit in March 2013. In addition, the Jamaican operation would have picked up a large exchange rate adjustment charge on its foreign currency denominated debt. The stage should, however, be set for it to return to profitability in the 2013/14 year.
There was also exceptional impairment and depreciation charge of US$86 million in the year ended March 2013. This was mainly due to the difficult environment in the Eastern Caribbean. The prior year charge consisted of a non-cash impairment and accelerated depreciation charge of US$244 million primarily due to poor financial performance in Jamaica.
Capital spend continues | C&W continues to spend on capital improvements within the Caribbean basin which includes Panama. Capital investments continued to be in 4G/HSPA+ mobile data networks supporting smartphone sales in Panama, The Bahamas, Barbados, BVI, St Lucia and Cayman, selective pay TV investments, and improvements to the fixed broadband network. These fixed broadband investments include continuing the fibre roll-outs in the Caribbean and completing the Next Generation Network in The Bahamas. They have also pursued strategic investments in transmission capacity and cable systems to support both retail and carrier sales asa well as advancing billing and customer relationship management systems.
They have completed the second year of investment in the Bahamas having invested around US$100 million in capital projects during that period.
[…] savings were also achieved in restructuring commission payments to mobile credit distributors and the wage bill was down in the quarter. However, administrative and other cost rose due to the outsourcing of the […]