Cable & Wireless hit by downturn in its Caribbean arm

Click to follow
The Independent Online

Cable & Wireless Communications shocked investors yesterday by warning it expected a further downturn in earnings from its Caribbean arm.

With economic conditions impacting on usage in the 13 countries making up the region, CWC said underlying earnings were likely to slide further from the $229m (£142m) recorded in the year to March, which itself represented a 15 per cent fall.

Call revenues in the region fell by 9 per cent, with both lower usage and higher numbers of people leaving, especially in Jamaica, where the country's poor economic situation is adding to the problems.

CWC now expects its underlying earnings from the Caribbean in 2011-12 to be in the range of $180m to $210m, down by a third in two years at the bottom of the range.

The warning sent shares in the group, formed following a demerger from its corporate telecoms arm last year, down 12 per cent to 42.4p, their lowest level since the split.

Tony Rice, chief executive of CWC, said the Caribbean has been more difficult than ex- pected since the demerger and it continues to face weak economies in the region.

Profits overall rose by 21 per cent to $462m last year, but on an underlying basis the performance was flat as revenues from the Caribbean business fell 3 per cent to $850m.

A better performance elsewhere partially offset this, with Macau doing well as smartphone usage takes off. Its operations in Panama, Monaco and the Maldives also progressed.