Panama pain for C and W Comms
Feb 10, 2012
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The revival of Cable and Wireless Communications, the telecoms firm providing services to islands and smaller countries, came to an abrupt halt on Friday as the company warned on profits.
Cable and Wireless Communications (CWC) is split into four divisions: the Caribbean, Panama, Macau and Monaco & Islands.
Of the four, Panama is seeing slower than expected progress and the firm admits it is facing pressure on margins. CWC says it will not achieve its outlook target for earnings before interest, tax depreciation and amortisation (EBITDA) of $270m - $295m. Instead EBITDA is likely to come in around $127m.
In the Caribbean, the company says the Jamaican market "remains difficult" with "poor financial performance". These problems will see non-cash write downs in the full year results. CWC expects the Caribbean to achieve EBITDA in the lower half of its target range of $180 - 210m.
In the Bahamas EBITDA is expected to exceed the target of $80m. It's a similar story in Macau where earnings will "marginally exceed" $160m.
Monaco and Islands (including Guernsey and the Maldives) will see earnings between $180m - £190m, at the upper end of the target range.
Commenting on the update Tony Rice, the Chief executive of Cable and Wireless acknowledged the problems in Panama but drew attention to the company's debt position: "Through the refinancing of the bank facilities and the issuing of $400m of bonds, we have raised sufficient financing to meet our expected needs through to 2016."
The update did not go down well with investors, the shares fell 7.8% in very early trading. Over the last 12 months the stock has dropped 15%.
BS
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