By Katie Linsell and Dara Doyle
Digicel, the mobile carrier company controlled by Denis O’Brien, has told bondholders that its quarterly earnings dropped 10%.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) in the three months to the end of March dropped to $253m (€219m) from the same period last year as the company altered tariffs and took a $3m hit from hurricanes, the company said in the presentation to bondholders.
Full-year earnings dropped 2% to just over $1bn, according to an earnings release seen by Bloomberg News.
Services revenues dropped 3%.
Mr O’Brien founded Digicel in 2001 and turned it into a mobile phone empire with customers spread from El Salvador to Vanuatu, financing the expansion partly with high-yield debt. The yield on the company’s 2020 bonds rose to 21%, approaching the record high of 23% reached earlier this month, data compiled by Bloomberg show.
Digicel’s operating cash flow decreased by 17% to $241m, due to lower EBITDA restructuring costs of $34m. The company had cash on hand, as of the end of March, totalling $155m.
Last month Bloomberg reported that Digicel plans to cut debt through a mixture of earnings growth and so-called inorganic measures, with the company looking to reduce borrowings to about 5.7 times earnings in the fiscal year 2019 from around 6.7 times in the year-earlier period.