DENIS O'BRIEN'S Digicel mobile phone operation in the Caribbean cut pre-tax losses last year by 33 per cent as revenue rose by $430 million (€277 million).
Accounts provided to Digicel Group Ltd's bond holders in New York, and seen by The Irish Times, show that the mobile phone company trimmed its pre-tax losses to $47.7 million in the year to the end of March 2008, from $71 million a year earlier.
When a tax charge of $26.7 million is added to this, Digicel's net loss was $74.4 million last year, down from $122.9 million in the previous 12-month period.
Digicel's revenues surged 38 per cent, to $1.56 billion, while its operating profit increased sixfold to $240 million.
The company was pushed into the red by interest payments of $296.4 million last year. This relates to the refinancing of Digicel Group by Mr O'Brien in February 2007, which resulted in senior debt of $1.4 billion being secured. Digicel booked finance costs of $117 million in fiscal 2007.
Digicel's subscriber base increased by 38 per cent during the period to 6.54 million. The company operated in 23 markets last year and plans to launch a service in the British Virgin Islands in 2008.
Digicel's cost of sales increased by 12 per cent to $567.2 million while its operating expenses amounted to $750 million, up from $581.7 million a year earlier.
Handset sales amounted to 3 per cent of revenues. Subscriber acquisition costs, including the cost of phones, declined to $256 million during the year.
Digicel's earnings before interest, tax, depreciation and amortisation (Ebitda) rose to $505 million in the year just closed, compared with $220 million in the previous period.
Its Ebitda in the fourth quarter of its financial year - January to March - rose by 56 per cent year on year to a record quarterly high of $172 million. According to the accounts, Digicel's operations in Guyana and El Salvador both turned "Ebitda positive" during the fourth quarter.
The company's revenues included a $10.4 million payment received by its subsidiary in Trinidad Tobago relating to interconnect charges paid retrospectively by another operator.
Digicel added 280,000 subscribers in the fourth quarter, "driven by robust performances in Suriname, Jamaica, El Salvador and Guyana".
The firm launched in Suriname last year, signing up 400,000 subscribers in four months. It also extended its sponsorship of the West Indies cricket team to 2012 at a cost of $4 million annually.
Digicel also issued a claim in the High Court in London last July against Cable Wireless (CW)seeking "multimillion pound damages". It alleges that CW was engaged in "illegal behaviour by impeding and delaying" Digicel's entry into some Caribbean markets.
All of Digicel's operations increased their revenues. Jamaica is by far its biggest market, with turnover rising to $491 million from $456 million in fiscal 2007.
Digicel's average revenue per user (Arpu) declined in the fourth quarter to $19.5 from $21.8 a year earlier due to the growth of "lower Arpu markets such as El Salvador, Guyana and Haiti".
