Billionaire O’Brien Said to See Earnings Decline at Digicel

  • Earnings drop 8 percent on unfavorable currency swings
  • O’Brien halted U.S. IPO plans last year amid market volatility

Digicel Group Ltd, the mobile carrier company controlled by Irish billionaire Denis O’Brien, saw first-quarter earnings fall on currency swings, two people with knowledge of the matter said.

Adjusted earnings before interest, taxes, depreciation and amortization slid 8 percent because of unfavorable foreign exchange rates during the first three months of its financial year from a year earlier, according to the people, who asked not to be identified as the details were not yet public. On a constant-currency basis, earnings rose 5 percent.

“Digicel doesn’t publish quarterly earnings but we’re very pleased with underlying first-quarter performance in local currency,” the company said in an e-mailed response to questions. “Digicel’s outlook remains positive as we monetize our substantial network investment of recent years.”

O’Brien had planned to raise as much as $2 billion in an initial public offering that would have been the second-biggest in the U.S. last year, before shelving the sale, citing volatility in equity markets. The company will probably hold off on a listing for at least a year to 18 months, O’Brien said in an interview with Bloomberg Television in May.
Worth $4 billion according to the Bloomberg Billionaires Index, O’Brien said at that time that Digicel remains “highly profitable” and plans to keep investing heavily, including through acquisitions.

O’Brien’s mobile-phone empire spreads from El Salvador to Vanuatu, built partly on the back of high-risk, high-yield borrowing which reached about $6.4 billion in March.
A gauge of borrowings, adjusted net debt rose to 5.69 times L2QA Ebitda at the end of June from 5.32 at end-March, the people said. The yield on Digicel’s April 2022 bond has risen to 11.7 percent from 11 percent a month ago. That’s still below the 14.6 percent yield six months ago.

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