Cable & Wireless Communications Drop 4.3% on Caribbean Woes, Bahamas Deal

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BREAKING NEWS <<<

By Jonathan Browning –

Cable & Wireless Communications Plc had the biggest drop in six weeks in London trading as its Caribbean business struggles to grow and analysts said cutting costs at a purchased company in the Bahamas may prove difficult.

“The one region that remains very difficult is the Caribbean,” Chief Executive Officer Tony Rice said in an e- mailed statement today. The region continues to be “challenging with tourist spend and hence consumer and business disposable income significantly below historic levels.”

Cable & Wireless Communications, which split from its parent company in March 2010, provides mobile and fixed-line services in Panama and the Caribbean. Earnings before interest, taxes, depreciation and amortization in the fiscal second half ending March 31 will be about the same level as the $115 million reported for the first half, the company said today.

“CWC’s underlying cash generation is insufficient to justify either the share price or fund the CWC dividend,” said Mark James, an analyst at Liberum Capital, in a note today. “We expect consensus estimates to continue to decline and remain sellers with a 27 pence target price.”
The stock declined as much as 4.3 percent to 47.15 pence, the biggest intraday drop since Dec. 30, and was down 3.2 percent as of 8:55 a.m.
Bahamas Acquisition

The company said it recorded a “stronger performance from Panama” in the current fiscal second half and that the units in Macau and Monaco continue to “trade well.”

Cable & Wireless Communications today said it signed an agreement to buy 51 percent of Bahamas Telecommunications Company for $210 million. The company is the leading mobile- phone, fixed-line and broadband operator in the Bahamas, a member of the Caribbean Community trading bloc.
“We fret about the costs of restructuring, and how difficult it may prove to lose staff,” Liberum Capital’s James said. “There has been well-documented backlash from unions to date.”

The company in December said it signed a non-binding memorandum of understanding with the government of the Bahamas for the acquisition of Bahamas Telecommunications.

  • Let’s do simple maths 51:49 that means 51 cents of every dollar will go to C&W a foreign entity while we get 49 cents. Any right thinking Bahamian would know that this is bad for the Bahamas. The monies C&W make will sure up their pension funds. Once again we think so lowly of our own.
    By the way BP can you say when the monopoly will be over for Cable Bahamas? They are a typical example when you have a private unregulated monopoly.

  • BP please read the business section in today’s Jamaican observer. LIME Jamaica lost 1.3 BILLION in dollars in the first quarter http://www.jamaicaobserver.com/business/LIME-Jamaica-loses-J-1-3-billion-in-first-quarter_8349802

  • What is the government saying that they will own 49% but on another note they are saying that they will sell shares of 9% and they later 25% shares will be sold which equal 34% SO in the final analyze the government will only have 15% shares. How much power can the government have with 15% shares

  • We gon get cheap minutes n iphone n crackberry! Thank GOD for da LIME! Silly Union Terrorist!

  • You people are really clueless hey?

    How is it that you all cant see where all of this is going? CW will be here for a while, they WILL bleed BTC to cover other ailings but you didnt hear the pm say that CW cud not leave the agreement right? Because they can at anytime they want. So bleed BTC and when it is broke, leave.

    Having lived in yard for most of my life and now back here in Nas it is very hopeless to see that the Bahamian mentality has not changed one bit. All about what is new and not what it costs. I will be a cost to the Bahamian people, a detrimental cost. Job losses, little to no sponsorships, horrible service, high rates and then the bad part of there being a majority rule by CW.

    Think people and do your history search. C&W and Cable Bahamas are being driven by the same group of persons. So who will be the new monopoly? You the Bahamian people or the all mighty foreigners.

    When will we as a people stop being sold for pence and shillings? I guess never, as long as we keep the “black crab syndrome” alive.

    • Totally agree with you. Some of us can’t see beyond sunrise and sunset!!!

  • You know Mr. Ingraham reminds me of Mr. Pindling.
    You can be against something he is doing whole hearty, but if you allow them to speak on the issue, and listen to them, they just have a way to convince you that what they are doing is right.
    After listening to Mr. Ingraham on in Tuesday night, I feel total for the BTC deal.

    I did not do what my father would do when “PING” went into “hypnotizing mode”…My father would say…DON’T LISTEN TO THAT MAN TURN OF THAT TV NOW!!!

    After Mr. Ingraham presented the BTC sale in Parliament this week, all of a sudden am for the BTC deal, I want TV on my phone.

    • @WISDOM, the last thing some of you need right now is more TV, read a book dude.

  • rates

    Now Vonage is charging for calls within The Bahamas to cell and landlines. I’m sure CW is going to charge us high rates for at least 3 years. They will take advantage here as they do everywhere. Its just business, though. Buy shares in LIME if you can.

  • Opposiation MPs ,Unions and cocern Bahamain Pleas be preapred for this wutless Government to try to pass oass this on Feb. 23. wen the House Meets

  • Man, C&W sound like they on a ship with a leaky bottom. I hope they will not bleed BTC to cover their losses in other Countries.

    It will be interesting to see what ‘our’ 49% earns us in 12 months. My bet is that we will all be shocked!!

  • We gon get cheap minutes n iphone n crackberry! Thank GOD for da LIME!

    • And I have a bridge on my property in Eight Mile Rock, Grand Bahama that I’d like to sell you, Mica!