Digicel sees earnings lift in third quarter

DENIS O’Brien’s Digicel has seen a rise in earnings for the third quarter of its financial year, to $251m (€231m).

Earnings before interest, tax, depreciation and amortization (ebitda) was up 4pc year on year to $251m the Bloomberg News service reported, citing an unnamed source.

Underlying ebitda was up 2pc to $247m. The far-flung telecoms operator – which has operations from Jamaica to Papua New Guinea – recorded net leverage of about 6.8 times earnings, with the company’s much watched net debt little changed at $6.8bn.

The company struck a refinancing deal with bondholders at the start of last year, but does face debt repayments.

Digicel’s 8.25pc bonds that fall due in September 2020 last traded around 68 cents on the dollar and its 6pc notes – due in April 2021 – traded at about 81 cents on the dollar, according to Bloomberg data.

The results are understood to show a 3pc increase in underlying service revenues, partly offset by currency movements. The latest numbers show a cash pile of $126m at quarter end. Underlying mobile data revenue was up 10pc.

Digicel’s income is in the many local currencies of the markets where it operates but its debt is in US dollars so depreciation in emerging market currencies versus the dollar has hurt its debt profile.

Net debt, on a rolling measure based on earnings across the past two quarters, has fallen from 7.3 times in the first quarter of last year, but remains stubbornly high.

Further asset sales or bond buy-backs could potentially reduce debt.