SALES GREW by 12 per cent to $2.2 billion (€1.78 billion) at Denis O’Brien’s Digicel telecoms group last year, as subscriber numbers surged across its 32 markets.
Within 24 markets in the Caribbean and El Salvador, the group made operating profits of $465 million in the year to the end of March, up 4 per cent on the previous 12 months. This came on flat revenues of $1.75 billion in these markets, with the company citing improved margins.
Digicel Group Limited (DGL) acquired its sister company Digicel Pacific earlier this year and, when its markets are included in the overall numbers, the company has 10.8 million users, up 15 per cent on 2009.
Revenues of $2.2 billion for the wider group, which also includes businesses in Dominica and Naura, show a compound annual growth rate of 24 per cent between 2007 and 2010. The group does not yet report consolidated profit numbers.
Digicel chief executive Colm Delves said it had been “another great year for Digicel”.
He said particular growth over the year had come from Central America and the Pacific, which added one million subscribers between them.
The Caribbean business grew its subscriber base by 400,000 to 7.5 million, with Digicel claiming 2 million customers in Jamaica of a population base of 2.8 million.
Mr Delves said the overall business had developed well since the end of March, despite various mitigating factors. The Haiti earthquake had not hit activity as much as might have been expected, he said, while acknowledging the threat of increased competition in the Haitian market. Difficult conditions in financial centres such as Cayman had been balanced by growth elsewhere, he added. “All markets are still showing growth,” said Mr Delves.
The results include a $16.75 million provision in relation to a failed Digicel court challenge based on claims that Cable Wireless had delayed its entry into Caribbean markets. Digicel has an appeal outstanding in relation to Trinidad, one of the locations covered by the original case.
Mr Delves said the firm was in good shape to consider expansion, having raised $1.8 billion to acquire Digicel Pacific, to refinance debt and for “general corporate purposes” over the year.
At the end of March, the group’s cash balances amounted to $416 million, while net debt came to $2.8 billion.
Over coming months Digicel will look to launch in Tahiti, and is also considering opportunities in Costa Rica and East Timor.
Mr Delves said the group was working on growing its data revenues to bring them more into line with European markets, where data accounts for up to 40 per cent of mobile sales. For Digicel, the average is closer to 10 per cent, although Mr Delves pointed to 138 per cent growth in BlackBerry usage over the year. The company is also hoping to introduce Apple’s iPhone to its markets.
