MIAMI, FL--(Marketwired - Nov 4, 2016) - Cable & Wireless Communications Limited ("CWC") is the leading telecommunications operator in substantially all of its consumer markets, which are predominantly located in the Caribbean and Latin America, providing entertainment, information and communication services to 3.5 million mobile, 0.4 million television, 0.6 million internet and 0.8 million telephony subscribers. In addition, CWC delivers B2B services and provides wholesale services over its sub-sea and terrestrial networks that connect over 30 markets across the region.
Liberty Global's Acquisition of CWC
On May 16, 2016, a subsidiary of Liberty Global plc ("Liberty Global") acquired CWC (the "Liberty Global Transaction"). Revenue, Adjusted Segment EBITDA and subscriber statistics have been presented herein using Liberty Global's definitions for all periods presented unless otherwise noted. Further adjustments to these metrics are possible as the integration process continues. The results for the six months ended September 30, 2016 ("Q2 2016/17") have also been aligned to Liberty Global's EU-IFRS accounting policies and estimates. Significant policy adjustments have been considered in our calculation of rebased growth rates for revenue and Adjusted Segment EBITDA.
Operating and financial highlights*:
- Delivered 9,000 organic RGU additions in Q2 2016/17
- Mobile revenue 2% lower than the prior year in Q2 2016/17, as compared to Q2 2015/16 on a rebased basis, due primarily to a decrease in the Bahamas
- Establishing Flow as a leading sports broadcaster in the Caribbean
- Successful Olympics campaign with over 4.6 million viewers tuning into Flow channels
- 85% increase in Flow Sports viewership in August versus May through July average
- Exclusive rights to broadcast Premier League commenced during the quarter
- Strengthened customer proposition in Panama through launch of MAST3R fixed bundles in September
- Providing HD, play from start, live pause and rewind functionality
- 300 Mbps broadband product now available to 135,000 homes
- YTD revenue of $1,141 million, 2% lower YoY, on a rebased basis
- 10% rebased top-line growth in Jamaica more than offset by declines in other major geographies primarily due to competitive and macroeconomic factors and lower managed services revenue
- Net losses of $18 million and $124 million in Q2 2016/17 and YTD, respectively
- YTD Adjusted Segment EBITDA of $411 million, up 1.5% YoY, on a rebased basis
- $9 million (4%) sequential EBITDA improvement from Q1 2016/17 to Q2 2016/17, reflecting margin improvement of 200 basis points
- Property, equipment and intangible asset additions declined to 17% of revenue in Q2 2016/17 from 25% in Q2 2015/16
- BTC in the Bahamas suffered significant infrastructure damage and business interruption as a result of Hurricane Matthew during early October 2016
- Anticipate Q3 2016/17 adverse Adjusted Segment EBITDA impact of $8 million to $12 million
- Total infrastructure repair costs estimated at $35 million to $45 million
- We expect that our third-party insurance will cover a significant portion of the hurricane-related losses
Synergies from combination with LiLAC
- LiLAC is targeting $150 million of synergies by December 31, 2020
- 50% OCF related -- primarily recurring cost reductions
- 50% capital expenditure related -- recurring and nonrecurring
- Anticipate a substantial amount of total LiLAC synergies will benefit CWC
* The financial figures contained in this release are prepared in accordance with EU-IFRS.28 CWC's financial condition and results of operations will be included in Liberty Global's condensed consolidated financial statements under U.S. GAAP10. There are significant differences between the U.S. GAAP and EU-IFRS presentations of our condensed consolidated financial statements.
We delivered organic subscriber growth across video, internet and telephony product categories in Q2 2016/17. In our mobile business, which represents roughly 40% of total revenue, postpaid subscriber growth was more than offset by a decline in our prepaid base, primarily due to the impact of competitive offers to lower value subscribers in Panama.
On the mobile front, we continue to invest in our networks to enable the delivery of high speed, resilient mobile services and leading converged products to our customers. We are actively expanding our LTE coverage in Panama and plan to launch LTE in the British Virgin Islands later this year.
Turning to our video, internet and telephony businesses, we added 9,000 organic RGUs during the quarter, as we achieved subscriber growth in each of our products. In terms of broadband internet, we added 7,000 organic subscribers on the back of 5,000 RGU additions in Jamaica and 2,000 RGU additions in Trinidad and Tobago. On the video front, we added 1,000 RGUs in the quarter, primarily driven by our DTH business in Panama. The increased RGUs from our DTH business were largely offset by declines in video RGUs in Barbados and Trinidad and Tobago as a result of increased competition.
During the quarter, our regional sports offering, led by Flow Sports and Flow Sports Premier, performed strongly, helping to establish Flow as a leading sports broadcaster in the Caribbean. Our official Olympic Games application was downloaded approximately 60,000 times during the event with over 73,000 hours of live content streamed. Flow Sports Premier, following its launch in July, also began providing unrivaled coverage of the Premier League in the region beginning in August 2016.
Rounding out fixed-line products, we added 1,000 telephony subscribers in the quarter, as we continued to modestly increase penetration of our VoIP-based services through bundling across our footprint.
At September 30, 2016, our bundling ratio stood at 1.51 RGUs per customer as 10% of our customers subscribed to a triple-play product, 32% to a double-play product, and 58% took only one product from us. This relatively low bundling ratio provides ample runway for RGU growth as we seek to sell additional products to our customers.
From a geographic standpoint, highlights of the trends in our largest markets are as follows:
- In Panama, mobile subscribers declined by 36,000 in the quarter on an organic basis with the decline weighted towards lower value customers as our postpaid base continued to grow (up 2,000). We are seeking to improve our fixed video and internet performance with our improved "Mast3r" bundles featuring HD, play from start, live pause and rewind functionality and 300 Mbps broadband speeds.
- In the Bahamas, we grew our mobile customer base by 4,000 subscribers (up 1%) due to increased promotional activity, successfully targeting higher-ARPU postpaid customers. We have made steady progress with our broadband internet and video products following the roll-out of our fiber-to-the-home ("FTTH") network, which now passes 14,000 homes.
- Turning to Jamaica, broadband internet and video RGUs were up 3% and 1%, respectively, as our improved product offering and strong Olympics campaign resonated well in the market. We grew our mobile subscriber base by 3,000 RGUs in the quarter, as we continued to win back market share and launched new products such as Flow Lend, an innovative solution enabling prepaid customers to request credit advances and earn rewards for prompt payment.
- In Barbados, competition drove RGUs lower across all products in the quarter. We are implementing changes to our bundling strategy and focusing on quickly migrating customers who are on legacy DSL services to our high-speed FTTH network.
- Rounding out our main operations, in Trinidad and Tobago we delivered 3,000 organic RGU additions, despite a tough macroeconomic environment and increased competition.
About C&W Communications
C&W is a full service communications and entertainment provider and delivers market-leading video, broadband, telephony and mobile services to consumers in 18 countries. Through its business division, C&W provides data center hosting, domestic and international managed network services, and customized IT service solutions, utilizing cloud technology to serve business and government customers.
C&W also operates a state-of-the-art submarine fiber network - the most extensive in the region.
Learn more at www.cwc.com, or follow C&W on LinkedIn, Facebook or Twitter.
About Liberty Global
Liberty Global is the world's largest international TV and broadband company, with operations in more than 30 countries across Europe, Latin America and the Caribbean. We invest in the infrastructure that empowers our customers to make the most of the digital revolution. Our scale and commitment to innovation enables us to develop market-leading products delivered through next-generation networks that connect our 29 million customers who subscribe to over 60 million television, broadband internet and telephony services. We also serve 10 million mobile subscribers and offer WiFi service across seven million access points.
Liberty Global's businesses are comprised of two stocks: the Liberty Global Group (NASDAQ: LBTYA) (NASDAQ: LBTYB) (NASDAQ: LBTYK) for our European operations, and the LiLAC Group (NASDAQ: LILA) and (NASDAQ: LILAK) (OTC PINK: LILAB), which consists of our operations in Latin America and the Caribbean.
The Liberty Global Group operates in 12 European countries under the consumer brands Virgin Media, Ziggo, Unitymedia, Telenet and UPC. The LiLAC Group operates in over 20 countries in Latin America and the Caribbean under the consumer brands VTR, Flow, Liberty, Mas Movil and BTC. In addition, the LiLAC Group operates a subsea fiber network throughout the region in over 30 markets.
For more information, please visit www.libertyglobal.com.