Phil Green, president of Cable and Wireless Jamaica.

Cable and Wireless Jamaica (C&WJ) remains choked by falling sales, but its bottom line was no worse off in its first quarter ending June 30 than a year ago, helped partly by tax credits.

Revenues were brought down by falling mobile sales, which declined by 16 per cent to $1.3 billion, the company said.

Overall, group sales fell by four per cent to $5.7 billion, but president and chief executive officer Phil Green also sliced $500 million off the company's cost of doing business to grow operating profit in the period by just under 50 per cent to $382.5 million (June 2007: $256m).

Redefine services

Green is marshalling C&WJ's 'transformation plan' to redefine products and services - including a $2-billion contract with Ericsson for the first phase remake of its mobile network - and improve customer response time, while cutting operating costs.

The telecommunication company brought prepaid Blackberry and the revised Homefone Xpress to market in June, launched new calling plans in May and announced a 100 per cent improvement in repair time and 57 per cent for installations.

But Green failed to contain operating expenses in the quarter, which moved up by just about $100 million to $3.38 billion on the back of higher employee expenses.

The company also shelled out close to half a billion dollars to service its multibillion debts, which wiped out all gains in the period.

C&WJ had pre-tax loss of $46 million - a 10 per cent improve-ment year on year - more than $18 of which was eliminated through tax credits to bring down net loss to $27.4 million. This was a slight 2.5 per cent improvement on the $28 million lost in June 2007.

Still indebted

Cable and Wireless has, in the past year, utilised $3.5 billion of credits to offset losses, and has just over $1 billion left to play with.

The telecom's $428.6 million bill to service its debts in the review quarter was substantially higher than the $276 million spent in June 2007.

The company, in the last quarter, restructured its debts and is now almost totally indebted to its parent, a liability that moved from $6 billion to $11 billion in the period, after Cable and Wireless International paid off a Citibank loan for the Jamaican operation in May.

Total liabilities remain above $21 billion on a balance sheet valued at $36 billion. Current assets of $5.8 billion outstrip short term liabilities by close to $100 million, while total equity remains below $15 billion, net of $4.6 billion of accumulated losses.

business@gleanerjm.com