Tuesday 27 September 2016

'No pressure' for Digicel IPO as group's reported earnings dip to $1.16bn

Published 01/07/2016 | 02:30

Dennis O'Brien, chairman and co-founder of Digicel Group Ltd
Dennis O'Brien, chairman and co-founder of Digicel Group Ltd

Digicel is under "no pressure" to undertake a stockmarket flotation after pulling a planned debut last year, according to group chief executive Colm Delves.

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Digicel, which was founded and is owned by its chairman, billionaire Denis O'Brien, cancelled the initial public offering (IPO) plans last year because of international market volatility.

"We're under no pressure whatsoever to do an IPO, either now, in a year's time, or any time in the future," Mr Delves told the Irish Independent. "We'll gauge it, but there are no immediate plans."

He was speaking as Digicel released figures yesterday that showed it generated $1.16bn (€1.04bn) in earnings before interest, tax, depreciation and amortisation (EBITDA) in its last financial year.

Digicel is active in 31 markets across the Caribbean, Central America and the South Pacific.

It has 13.8m subscribers across its markets, for services from mobile to cable TV and broadband.

The reported EBITDA figure for the 12 months to the end of March this year was 1pc lower than in the previous financial year, as Digicel was adversely impacted by a strengthening US dollar compared to the local currencies in which it operates.

But adjusted EBITDA was 9pc higher for the 12 months to the end of March this year, when the foreign exchange volatility is stripped out.

Digicel said that its service revenues rose 3pc to $2.73bn in constant currency terms during the last financial year. But reported service revenues were 3pc lower due to the foreign exchange headwinds.

Mr Delves said the company is used to dealing with currency volatility.

"Currency exposure is something that we've always dealt with," he said. "Last year there were particularly strong headwinds. It wasn't just emerging market currencies. We have a sizeable business in French West Indies (which uses the euro, which also weakened)."

Digicel said that with no major debt maturities arising until its 2021 financial year, the company has continued to invest in key growth areas - data, business solutions, cable TV and broadband.

Mr Delves said the group will have "several options" when $2bn in debt approaches maturity.

"There are several options, whether it's a straight IPO, or other forms of equity. But typically, what we have done, is a refinancing of bonds. We've done that repeatedly over the years. We've plenty of time to do it," he said.

Its total debt fell slightly to $6.36bn at the end of March.

In the last financial year, Digicel invested $590m in capital expenditure on its networks.

Of that, $200m was invested in its fibre-to-the-home (FTTH) network across Jamaica, Trinidad and Tobago, and Barbados.

Irish Independent

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