CWC’s 1st Quarter Trading in line with outlook & Columbus integration progressing well

This announcement provides an update on the First Quarter performance and financial position of the Group since the year ended 31 March 2015. Interim results for the period ending 30 September 2015 are expected to be announced on 5 November 2015.

Highlights

  • Group revenue of US$583 million, up 4%

    • CWC (excluding Columbus) revenue grew by 2%, Columbus up 12%

  • Mobile revenue flat against prior year with mobile data up 16% and 5% subscriber growth

    • LIME revenue growth of 10%, offset by a 9% decline in BTC due to reduced roaming rates

  • 7% broadband and 2% video subscriber growth across Group

  • Managed services revenue grew by 14% but Government contract awards in Panama were slow

  • Integration progressing well; new management and organisation in place – c.140 management FTEs identified as leavers

Phil Bentley, Chief Executive of CWC, commented

Phil Bentley, Chief Executive of CWC, commented

“In the First Quarter we have made a good start on integration and have maintained momentum through organic growth. Mobile revenue was flat against the prior year and good progress was made in broadband and video. In Panama, we saw a delay in Government contracts being awarded. However we have invested in our Latin American managed services sales and marketing teams and continued to see strong revenue growth there. Cost synergies have been identified and embedded in management targets for the year; a new retail store format has been developed with plans in place to harmonise our product offering under the FLOW brand; and early results from cross-selling initiatives have been positive. Based on the First Quarter’s trading we maintain our guidance for the year.”

Group Trading Performance

Mobile (40% of total Group revenue) was flat in the First Quarter as strong growth in LIME, up 10%, was offset by a 9% decline in BTC. LIME growth was driven by continued subscriber additions in Jamaica (+17%) where investment in our mobile network led to revenue growth of 24%, whilst in our latest LTE market of Antigua, mobile data grew by 100% and ARPU was up 22%. Panama mobile performance was in line with the prior year as postpaid growth driven by increased subscribers (up 12%) was offset by continued prepaid competition. As expected, total mobile revenue in BTC was impacted by reduced international roaming rates (roaming revenue down 40%) in advance of a new mobile competitor entering the market later this calendar year.

Fixed voice (15% of Group revenue) declined 5% versus the prior year, as pressure from mobile substitution led to reduced ARPU, particularly in Panama.

Broadband (13% of Group revenue) was 14% higher against the prior year, as subscribers grew across all regions. In Panama and LIME, we saw continued subscriber growth (+2% and +4% respectively) drive revenue higher as we focused on marketing strategies that targeted double and triple play bundles. In BTC, growth in broadband subscribers was offset by lower ARPU due to promotional strategies aimed at increasing market share. FLOW revenue growth was driven by subscriber additions in Trinidad, Barbados and Jamaica, and increased demand for higher tier data packages to enable running multiple connections and streaming content.

Video (9% of Group revenue) grew 11%. In Panama, subscribers were up 41%, and revenue rose 25%, driven by further penetration of our prepaid DTH service. We have recently launched an IPTV service in the Seychelles and plan to launch video across a number of Caribbean markets later this calendar year. FLOW revenue growth was driven by the phased implementation of higher ARPU Advanced Video Services (AVS) replacing legacy Video services. This increase was offset by lower subscribers due to adopting a more aggressive disconnection and debtor management process.

Managed Services (16% of Group revenue), grew 14% and was strengthened against the prior year by the acquisition of Sonitel in Panama. However there continued to be delays in awarding Government contracts in the First Quarter. Colombia performance was up 28%, aided by the Promitel acquisition in May 2014, whilst revenue in other Latin American markets, excluding Colombia, grew organically by 26%.

Wholesale (7% of Group revenue) grew 9% as rising demand for capacity more than offset unit price compression.

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