* Group revenue of US$1.2 billion up 4%; 5% higher at constant currency against the prior year

* Group EBITDA of US$427 million up 4%; proportionate EBITDA increased by 5% against the prior year

* Excellent performance in the Caribbean, our largest region, with EBITDA up 22%; cost restructuring launched in Panama and the Bahamas

* Momentum building with second quarter EBITDA 11% higher than prior year; up 13% on proportionate basis

* Strong progress with integration plans

* US$25 million total net run-rate cost savings achieved; anticipated exit run-rate of US$70 million for 2015/16

* Unified FLOW brand launched in Barbados, Jamaica, Trinidad and Tobago, Cayman, and St. Kitts and Nevis; early cross selling success

* Operating cost synergies upgraded by 47% to US$125 million; no change to US$110 million costs to achieve

* Second year of Project Marlin; US$265 million capital investments focussed on fixed network integration, fibre rollout and reinforcing mobile networks

* 6% customer growth: mobile data subscribers up 38%, broadband subscribers up 7%

* Operating cash flow up 30% to US$162 million following EBITDA growth and lower capital expenditure

Commenting on the Group results, Phil Bentley, Chief Executive of Cable & Wireless Communications Plc, said:

“Our Company has significant growth and synergy potential. Whilst we are in the first phase of our 3 year plan, we are pleased with initial progress and expect to deliver a strong second half and full year performance in line with outlook. We are also pleased to have identified additional synergies, lifting our previous US$85 million expectation to US$125 million whilst maintaining the same anticipated costs to achieve those savings. We remain on track with our 3 year plan and are confident our business model will deliver significant long-term shareholder value creation.

“Project Marlin is now in its second year and, having established HSPA+ as the minimum network standard across CWC’s mobile footprint, our focus is now on LTE upgrades in select markets. We are also rolling out high-speed data networks in our markets and passed an additional 33,400 homes with 832 kilometres of fibre during the half whilst upgrading 53,000 customers in Barbados from legacy networks. We are also excited to have secured exclusive Premier League football rights from 2016/17 to 2018/19, which we will carry on our new channel, FLOW Sports Network, set to launch in the third quarter.

“The team has been doing an excellent job focussing on integration activities, combining our fixed networks, launching our new “FLOW” quad-play brand, and introducing a more efficient organisational model to drive synergies and accountabilities. Momentum generated from our investments, and synergies from the integration, led to 11% growth in EBITDA in the second quarter versus last year, further underpinning confidence in our 3 year plan. We expect this momentum to continue in the second half.”

US$m Six months ended 30 September 2015 Six months ended 30 September 2014 Change

Revenue 1,179 1,132 4%

EBITDA 427 412 4%

Proportionate EBITDA 327 311 5%

Operating cash flow 162 125 30%

Note: Prior year comparative figures are pro forma Columbus and exclude US carve-out entities. EBITDA and adjusted earnings per share are defined in the footnotes on page 3 and reconciliations are provided on pages 33 and 34. Proportionate EBITDA is defined as Consolidated EBITDA less EBITDA attributable to minority interests. Operating cash flow is defined as EBITDA less capital expenditure.


Overall economic growth prospects in our markets remain positive with some variability between countries. Latin American countries such as Panama and Colombia have relatively robust forecast GDP growth rates of 6% and 3% respectively, whilst in our Caribbean markets there are lower growth rates as the region continues to show a more modest pace of recovery following the previous economic downturn. Certain markets in Latin America have experienced currency devaluation in the past year, however 87% of CWC’s EBITDA is US dollar pegged, managed or linked.

Although we face increasingly competitive conditions within some markets, for example with the introduction of mobile competition in the Bahamas later this fiscal year, and continued subsidised mobile offers in Panama, we expect to continue making good progress in growing our video, broadband and B2B revenue and reducing our operating cost base following our acquisition of Columbus.

With increasing traffic over our networks, improved service reliability, a focus on improving NPS following the negative impact of migration activities, and a more diversified set of products and services to offer our customers, the decisions we have made to invest in our infrastructure and our people position us well to capitalise on the positive growth trends across our underpenetrated markets. We invested heavily in growing our B2B sales organisation across Latin America in the first half, and therefore we anticipate that our monthly recurring revenue at the end of the year will be significantly higher than at the start.

Commenting on the Group outlook, Phil Bentley, Chief Executive of Cable & Wireless Communications Plc, said:

“Run-rate integration cost synergies ended the first half at US$25 million and we expect these to total US$70 million by the year end. However, this is only the initial phase of realising the cost synergy benefits identified over the next three years which have now been raised to US$125 million. In addition there are significant opportunities to deliver revenue synergies from cross-selling and up-selling which, when combined with network and back office improvements under Project Marlin, create the ideal conditions for material revenue growth to be added to the upgraded cost savings flowing from the Columbus acquisition.”

As previously stated, our strategy is expected to deliver, in the three years to 31 March 2018:

* Annual mid to high single digit revenue growth and significant EBITDA growth

* Our focus in the first half of the year to 31 March 2016 has been on the integration of Columbus which has generated positive early results and is creating momentum for an improved second half operating and financial performance;

* Run-rate operating cost synergies of US$125 million and total capex synergies of US$145 million

* We plan to deliver US$70 million of operating cost synergies, a higher level than previously guided, on a run-rate basis and 35% of our capex synergies by 31 March 2016;

* EPS accretion – material accretion from 2016/17; dilutive in 2015/16; and

* Following completion of Project Marlin, capital intensity is expected to fall to c.14% of revenue in the year ending 31 March 2018

* Capital expenditure was 8% lower in the first half against the prior year and we remain on target to meet our outlook.

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