Interest cost jump burdens C&W
At the same time, profit before finance cost moved from a loss of $179 million in the six months to September, to a profit of $645 million. Higher finance cost, jumped from $730 million to $1.98 billion for the six months, from the year before, resulting in a similar loss as in 2103 of $600 million for the quarter and $250 million lower than in 2013 for the six months, to end at $1.32 billion.
Mobile subscribers grew by 125,000 during the April to September period and Mobile traffic increased by 34 percent and mobile service revenue is up 38 percent, the company reported.At the end of March Cable & Wireless stated that they had 705,000 mobile customers. The increase since March, puts active mobile customers at roughly 830,000, by the end of September. At the end of June this year, Mobile subscriber base increased by 37 percent with revenue increasing by 34 percent, broadband base increased by 12 percent with revenue up 39 percent. The continued strong growth in mobile customers is resulting in increased revenues for the local company, moving them closer to a break-even point.
The company cut employment cost sharply for both the quarter and six months but increased marketing spend to push various mobile and internet plans and boost the customer base, which should redound to benefit increased revenues, going forward.
The second half of the year is more profitable for the company, with the revenue to be booked for the telephone directories and lower marketing cost in the final quarter of the year. Lower Treasury bill rates should see the interest rate that is used to book interest, being lowered by almost 25 percent compared with the first half of the year. IC Insider is projecting a profit in 2015/16 as revenues should continue the strong growth with the push to capture a larger portion of the cellular market and the double benefit of lower out payment cost per customer as the base grows and increase revenue from voice and data.
Cable & Wireless Plc acquires Flow
Cable & Wireless Communications Plc (“CWC”) today announces that it has agreed terms to purchase 100 percent of the equity of Columbus International, a privately-owned fibre based telecommunications and technology services provider operating in the Caribbean, Central America and the Andean region, for USD1.85 billion.
“The move will significantly enhance CWC’s growth profile and accelerate the progress towards each of its strategic goals unveiled in May. CWC also announced the placing of new shares constituting approximately 9.99 percent of CWC’s outstanding share capital which will be used to finance in part the proposed acquisition. The Enlarged Group is expected to generate significant operating cost and capital expenditure synergies, with additional revenue benefits also available. The transaction will be earnings neutral in the first full year post-completion and materially earnings enhancing in subsequent years” CWC directors stated in their release.
Columbus is a privately-owned diversified telecommunications and technology services company, based in Barbados, with approximately 700,000 residential customers in the Caribbean, Central America and the Andean region. In the Caribbean, it is one of the leading providers of triple-play cable TV and broadband enabled services over its proprietary fibre optic network infrastructure. Through its wholly owned subsidiary, Columbus Networks, Columbus provides backhaul connectivity to 42 countries in the region, as well as capacity and IT services, corporate data solutions and data centre services throughout the Caribbean, Central America and the Andean region. Columbus also provides next generation connectivity and IT solutions, managed networking and cloud-based services under the brand Columbus Business Solutions.
For the year ended 31 December 2013, Columbus had revenue of USD505m with EBITDA of USD216m and total operating profit of USD104m. For the six months ended June 2014, Columbus had revenue of USD284m with EBITDA of USD118m and total operating profit of USD48 million.