On the heels of ratings agency Fitch warning that Digicel faces imminent refinancing risk and will likely have to restructure its 2021 bonds, news has emerged that the company suffered a dip in earnings for the July to September quarter.
According to the Irish Times newspaper, a slump in the value of currencies in some of its main markets against the US dollar offset an underlying improvement in revenues.
Despite news of the dip in earnings, Digicel bonds edged slightly higher on Monday as investors took comfort from an improving business trend, with data revenues continuing to grow strongly, having overtaken flagging mobile voice revenues late last year.
Sources said earnings before interest, tax, depreciation and amortisation declined by one per cent in the quarter to US$250 million compared with the same period last year.
While underlying revenues rose four per cent, they fell one per cent on a reported basis to $554 million, dragged down by a $26 million currency hit.
This was mainly as a result of a weakening of the Haitian gourde against the US dollar, the currency in which Digicel reports financials and in which most of its $7 billion debt pile is denominated.
Digicel's cash position declined, however, to US$180 million from US$214 million earlier this year.
The Digicel update, issued to bondholders on Monday, did not address how it plans to go about refinancing US$1.3 billion of bonds that mature in early 2021, which has become a growing issue for the company's creditors and debt ratings firms.