CWC sees shares dive as Caribbean arm suffers
Cable & Wireless Communications expects a further downturn in earnings from its Caribbean arm, sending shares down nearly 10%.
Caribbean crunch: Tough economic times impacting on the 13 countries in region
With economic conditions impacting on usage in the 13 countries making up the region, C&W said underlying earnings were likely to slide further from the £142m recorded in the year to March, which itself represented a 15% fall.
Shares have dived 4.8p (9.9%) to 43.2p today, their lowest level since last year's demerger from the firm's corporate telecoms arm.
Call revenues in the region fell by 9%, 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 £112m- £130m, down by a third in two years at the bottom of the range.
Tony Rice, chief executive of London-based Cable, which also has operations in Macau, Panama and Monaco, said the Caribbean has been more difficult than expected since the demerger and it continues to face weak or declining economies in the region.
Profits overall rose by 21% to £287m last year, but on an underlying basis the performance was flat as revenues from the Caribbean business declined by 3% to £528m.
A better performance elsewhere partially offset this, with Macau doing well as mobile phone demand is booming as smartphone usage takes off. Panama also progressed, as did the operations in Monaco and the Maldives.
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