Mixed signals coming from Digicel
Telecommunications company announces strong financials while staff retrenchment in the works.
KINGSTON, Jamaica, Thursday June 7, 2012 – The Digicel group raised US$2.54 billion in revenue for the financial year ending March 31, according to a release issued by it this week.
However, despite these good fortunes the Jamaica-based telecommunications company appears to still be on a mission to retrench workers across its Caribbean operations.
Reports coming out of Barbados are that Digicel is expanding its offer of separation packages to workers on that island and other parts of the region.
Barry O’Brien, Digicel’s chief executive officer for Barbados and the Organization of Eastern Caribbean States South, confirmed to one media house there that the process was underway and it was “completely voluntary”.
While O’Brien neither gave a target figure for the retrenchment, a similar move in Jamaica in 2009, which saw about 10 per cent of its staff cut.
Despite this signal that Digicel is looking for ways to cut operational costs, the financial results show that in the face of prevailing poor economic conditions across the region, the company saw its subscriber base grow by 27% to 12.8 million last year, and revenues grow by 14%, while earnings before interest, taxes, depreciation and amortization (EBITDA) stood at a record US$1,082 million – up from US$954 million in the previous year – representing a year on year increase of 13%.
The Digicel Group Limited, which comprises 30 markets in the Caribbean, Central America and the Pacific, reported that its value added services and data revenues were up an impressive 47% year on year and now account for 20% of overall service revenues. This growth was attributed in part to Digicel's 4G Mobile offering which is now available in 14 markets across the globe (with further rollouts planned) and by the rise in smartphone usage. The diaspora business meanwhile saw its revenues grow by 28% year on year.
Digicel's balance sheet and liquidity position continued to show improvement with cash reserves of over US$657 million at 31 March 2012.
Commenting on the performance, Digicel Group CEO, Colm Delves, said; "I am pleased to report that Digicel has closed out another strong year in which, for the first time in our 11 year history, our annual EBITDA was over US$1 billion. With 12.8 million subscribers across 30 markets, Digicel has delivered 14% revenue growth placing us at the leading edge of performance amongst telecoms operators worldwide."
He continues; "I would like to take this opportunity to thank our customers for their loyalty to Digicel and our partners and staff who always go the extra mile to ensure that our customers benefit from what we do and how we do it."
Denis O'Brien, chairman and founder of the Digicel Group, commented said the announced results reflected the continued growth and development of Digicel in the Caribbean, Central America and Asia Pacific and he attributed the success of Digicel to the commitment of its strong management team and workforce and their focus on the highest standards of service delivery in all markets.