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Digicel rakes in US$2.23B for last year

Jun 28, 2011 News

Regional telecommunications giant, Digicel Group, has announced revenue of US$2.23 billion for the financial year ended March 31, which the company states increases income by 27 per cent over the previous year.
Digicel said that it posted a similar 27 per cent growth on earnings before interest, taxes, depreciation, and amortization (EBITDA) of US$954 million for this year up from $753 million as of March 31, 2010. Also, the company said that its subscriber base went up six per cent to 11.5 million across all 32 markets.
Digicel’s investment across its 32 markets worldwide totals US$4.5 billion and the company employs more than 5,500 people. It entered the Guyana market in 2006 and boasts 95 per cent phone coverage locally.
“Digicel’s balance sheet and liquidity position has continued to improve with cash reserves of over US$600 million at 31 March, 2011.  The Group’s financial performance has been endorsed by ratings agency Fitch, which recently upgraded the Group’s debt as a result of its continued strong operating performance,” the company stated.
Fitch, which assesses and grades the financial viability of companies internationally, has given Digicel an Issuer Default Rating of ‘B’.
Fitch describes its ‘B’ rating as highly speculative and explains it indicates that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however capacity for continued payment is vulnerable to deterioration in the business and economic environment.
Stating that Digicel’s rating outlook is ‘Stable’, Fitch reported: “The rating actions reflect Digicel’s continued strong operating performance, increasingly diversified revenue and cash flow generation, improved free cash flow generation and expectation of stable metrics.
Digicel’s ratings are supported by its position as the leading provider of wireless services in most of its markets and strong brand recognition. The ratings are tempered by continued high leverage and exposure to politically unstable economies. In Fitch’s opinion, Digicel will strengthen its competitive position in Jamaica which is the most important country in terms of EBITDA generation for the company despite losing some cash flow diversification”.
Other leading EBITDA markets are Haiti, Trinidad and Tobago, the Eastern Caribbean islands, and Papua New Guinea.
Digicel, in early March, struck a deal to buy out a Jamaica fast rising third party competitor, Claro, narrowing down competition in that market to only Lime (formerly Cable and Wireless). Digicel lays claim to 2.1 million subscribers among the island’s population of 2.8 million.
According to Digicel, it made significant progress in terms of data service and data revenue up 104 per cent year on year and continued strong growth of non-SMS data revenue, and data now accounts for 15 per cent of service revenue.

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