Tuesday 20 February 2018

Digicel posts annual earnings above $1bn for the first time

John Mulligan

John Mulligan

Digicel, the mobile phone group founded by businessman Denis O'Brien, has posted annual earnings of over $1bn (€803m) for the first time since it launched back in 2000.

Digicel, which provides mobile services across the Caribbean, in Central America and the Pacific, said its earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 13pc in the year to the end of March to $1.08bn.

It said that revenue in the period was 14pc higher at $2.54bn (€2.04bn), representing an EBITDA margin of 45pc.

The company said that it had 12.8 million subscribers at the end of last March, 27pc more than a year earlier. Revenue from data services were also ahead, rising 47pc year-on-year.

They now account for 20pc of all service revenues. Service revenues exclude revenue generated from retail operations that sell phones and other accessories.

Digicel said the growth in data revenue had been fuelled by its 4G mobile offering, which it has made available in 14 of the 30 markets in which it operates.

Group chief executive Colm Delves said that the latest set of results demonstrated the company was at the "leading edge" of performance amongst telecoms operators around the world.

Mr O'Brien, chairman of Digicel, said the results reflected continued growth across all the company's markets.

The company said it retained cash reserves of $657m (€528m) at the end of March and that ratings agency Fitch recently reaffirmed ratings on a number of Digicel bonds, citing its "strong operating performance, diversified revenue and cash flow generation".

"Digicel's credit quality is tempered by continued high leverage, medium-term refinancing risk and exposure of operations to low rated countries," the ratings agency added last month.

Fitch said that leverage at Digicel "remains high" -- the group had $4.5bn (€3.6bn) in net debt at the end of 2011, which would have risen to $5bn in early January.

However, the agency said Digicel's leverage is expected to gradually decline in the medium term as EBITDA grows and indebtedness remains relatively stable.

Digicel faces debt maturities of $510m in 2014 and $1.4bn in 2015. "Inability to refinance in advance of these maturities will pressure liquidity and the ratings," said Fitch.

The company had briefly looked at the possibility of acquiring troubled Eircom, which will exit examinership next week. Mr O'Brien reportedly gained about $800m (€643m) from a 2007 funding round at Digicel. The company has grown rapidly since its inception, targeting growth in a large number of relatively poor countries.

Irish Independent

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