Posts Tagged Digicel Deficit
Digicel’s huge deficit
Posted by ShopinJA in Business News on June 24th, 2009
Telecom’s strong EBITDA growth support heavy borrowing
Wednesday, June 24, 2009
The US$41-million annual net profit that Digicel Group reported for its financial year that ran to March 31, 2009, did little to impact the more than US$1.2 billion it has racked up in deficits over the years since it started operating in the region eight years ago.
The RKA building in which Digicel's Jamaican operations is headquartered.
The telecommunications company’s deepening foray into the region is also carrying with it a burgeoning debt, which has been supported primarily by Digicel’s strong growth in earnings before interest, tax, depreciation and amortisation (EBITDA) and which carries a high interest component that draws down huge amounts of cash out of the firm’s coffers.
The Irish-owned telecom, which started operating in the region when it opened its doors in Jamaica in 2001, has actually been posting quarterly net profit, albeit small relative the sizeable deficit, since the December quarter of 2007 and has seen considerable improvement over the last two quarters reported - US$10.5 million in the December quarter of 2008 and US$24.8 million in the March quarter this year.
