Cable & Wireless Jamaica Limited (CWJ) for the six months ended June 31, 2017 reported an 11% increase in revenue to $13.21 billion relative to $11.85 billion in 2016. The Managing Director, Stephen Price, attributed the improvement to an, “increase in Mobile revenues by 22% year-on-year on a rebased basis. As more subscribers join our wireless network, we continue to satisfy their demand for Mobile data. Year-on-year, our Mobile subscriber base has increased 5% and our Mobile data subscriber base is up 13%, which in turn has resulted in an increase in our share of the Mobile market.” Mr. Price also indicated, Broadband and the C&W Business (“B2B”) segments recorded growths of 5% and 9% year over year respectively. For the second quarter, revenue improved 13% to close at $6.84 billion compared to $6.04 billion for the comparable period in 2016.
Operating costs before depreciation and amortization rose by 12% to $8.75 billion up from $7.82 billion in 2016. According to CWJ this was, “largely due to a 17% increase in outpayments and direct costs, primarily due to an increase in interconnect costs associated, in part with an increase in mobile and international fixed line activity and a 9% net increase in employee, administration, marketing and selling expenses, driven by higher management and royalty fees.” The company recorded a 6% decline in operating costs before depreciation and amortization in the second quarter to $4.24 billion relative to $4.51 billion booked for the corresponding period in 2016.
Depreciation of for the six months amounted to $1.47 billion compared to $1.88 billion a year earlier. Amortization year over year decreased 15% from $600 million to $512 million.
As a result operating profit decreased by 23% for the period to $2.47 billion when compared to the comparable period in 2016 of $3.22 billion. Management noted this was, “primarily due to the net effect of (i) the prior period reversal of an impairment charge of J$3,404m, due to a change in strategy related to the utilization of the assets that were originally impaired, (ii) the increase in revenue and (iii) the increase in operating costs.”
Finance income declined by 75% from $110 million to $28 million for the first six months of 2017. Finance expenses increased by 23% to $2.70 billion relative to $2.20 billion in 2016.
Loss before taxation for the six month period amounted to $198 million relative to a profit of $1.13 billion for the corresponding period in 2016.
Consequently, net loss for the period amounted to $310 million compared to a profit of $1.11 billion a year earlier, following taxation of $112 million, (2016: $17 million). Net profit for the quarter amounted to $223 million relative to a loss of $695 million in 2016.
The loss per share (LPS) for the six month period amounted to $0.018 versus earnings per share (EPS) of $0.066. The EPS for the quarter amounted to $0.013 compared to a LPS of $0.041. The twelve months trailing loss per share is $0.07, the number of shares used in this calculation was 16,817,439,740.
Balance Sheet Highlights:
The company, as at June 30, 2017, recorded total assets of $40.41 billion.
Total Stockholders’ deficit as at June 30, 2017 closed at $30.21 billion; this resulted in a book value of -$1.80.
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.
