International telecommunications company Cable & Wireless Communications (CWC) is on a mission to reduce its Caribbean operating costs by US$100 million.
And the company said its businesses in Barbados and the region were on target to meet the cuts, with US$18 million reduced up to the end of September last year.
News of this came in a recently reduced half-year report quoting CWC’s former chief executive Tony Rice, who was succeeded by Phil Bentley effective January 1.
“Our productivity and efficiency programme has started well. The Caribbean has been the focus with operating costs reducing by US$18 million in the first half and we expect to step up the pace in order to meet our US$100 million target. Centralizing our regional operations in our new Miami office will be a key driver and I’m pleased to report we’ve made good progress in establishing our new regional hub,” Rice said in his last report to shareholders.
Good progress
He noted that the first half of the 2013-2014 financial year “was characterized by an impressive performance in our mobile business and good progress on our cost reduction programme”.
“Growth in mobile revenue and EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortization] of three per cent for the group was a strong result given competition and other market challenges we faced,” he said.
“We are setting the standard for mobile data in our markets, and customers are responding. Mobile data revenue rose 29 per cent over the half with all regions seeing growth. We are continuing to invest in mobile data, particularly in Long-Term Evolution (LTE) networks, which we launched in Monaco recently and will launch in The Bahamas and Cayman in the second half.
“We continue to improve in Jamaica, particularly in mobile where our customer base is up 23 per cent and mobile service revenue rose 14 per cent at constant currency during the half. We are presenting innovative products to our customers, and have successfully positioned our business as the ‘value’ provider, in a very price sensitive market.”
Rice reported that CWC’s earning a US$8 million net profit “following anticipated exceptional charges related to the group’s cost reduction activities”. Total operating profit was US$160 million, while the group’s revenue fell by three per cent to US$935 million.
Increased usage
“Mobile revenue was up three per cent on the prior year as increased penetration and usage drove strong mobile data growth of 29 per cent. Fixed voice revenue continued to be adversely impacted by declining voice traffic and lower rates.
Enterprise, data and other revenue declined by ten per cent. However, this was largely due to a change in accounting following the outsourcing of our LIME directory businesses – this would have been three per cent lower on a like-for-like basis,” he said.
“EBITDA was three per cent ahead of the prior year at US$298 million as Panama returned to growth and the Caribbean achieved a six per cent reduction in operating costs. Operating profit before exceptional items was four per cent lower than the prior period . . . primarily due to lower associate profit from TSTT [Telecommunications Services of Trinidad and Tobago] following a one-off charge in relation to a staff pay dispute,” he added.
Rice said the results “show our core businesses are performing well – providing a strong platform on which we can grow”.
“As I hand over the reins to Phil Bentley, I am confident we have a business well prepared for future growth. I wish him and the rest of our excellent team the very best in delivering that future,” he said.
Having left the CWC board at the end of 2013, Rice “will continue to provide advice to the group on Government relations until June”. (SC)
