Liberty Latin America – the parent entity of Flow – experienced a decline in revenue, operating cash flow, and new subscribers last year, according to its recently released 2017 financial results.
The financial report was the first one released since telecoms giant Liberty Global completed the separation of its Latin American and Caribbean businesses – including the Cayman branch of Flow – into a separate entity called Liberty Latin America in January. The move was made in part to lessen Liberty Global’s tax bill in the U.S., according to U.S. Securities and Exchange Commission filings, which stated that the separation will consist of a number of transactions that are “intended to qualify as tax-free spin-offs for U.S. tax purposes.”
The reported declines – a US$148 million operating loss, a 30-percent decline in new subscribers, a two-percent revenue decline, and a six-percent decline in operating cash flow from the year prior – were largely attributed to the hurricanes that damaged many of Liberty Latin America’s markets in the Eastern Caribbean last September.
For example, Liberty Latin America gained more than 81,000 subscribers in Chile and 44,000 new subscribers in its smaller Caribbean markets, but lost more than 60,000 subscribers in Puerto Rico, which was devastated by Hurricane Maria. In total, the company added about 65,900 new subscribers last year, down from 94,000 in 2016, according to the financial statement.
The company stated that rebuilding efforts are under way.
“As of Dec. 31, 2017, we have been able to restore service to approximately 340,000 [subscribers] of our total 738,500 [subscribers] at Liberty Puerto Rico,” the company stated in SEC filings. “Additionally, services to most of our fixed-line customers have not yet been restored in the British Virgin Islands, Dominica and Anguilla. While mobile services have been largely restored in these markets, we are still in the process of completing the restoration of our mobile network infrastructure.”
Liberty Latin America added that 530 miles of cable has been restored in Puerto Rico.
Despite the declines of 2017, the company stated that it expects to rebound this year.
“Looking to 2018, it will be a challenging year as we work towards recovery in several of our Caribbean markets following the hurricanes,” stated Liberty Latin America CEO Balan Nair. “However, we are on-track to getting our networks and customers back on-line. Combined with strong ongoing performance in Chile and momentum building at Cable & Wireless, we are establishing an exciting platform for sustainable growth.”