LONDON Telecoms firm Cable & Wireless Communications CWC.L enjoyed a good start to the year due to solid performances in Macau and the Maldives, offsetting the continuing problems in its key Caribbean market.
C&W Communications said on Wednesday the group had traded in line with expectations, despite its struggles with falling tourist numbers, a weak economy and strong competition in the Caribbean.
Shares in the group were up 2 percent in early trading, ahead of the wider telecoms index, which was up 1.4 percent.
"We have not seen any improvement in the underlying economies in the Caribbean," the group said, adding that it had had to introduce promotional programmes which diluted the average revenue generated per user.
"Macau and Monaco & Islands are both performing well backed by more favourable economic conditions," the company said. "Panama is seeing stronger economic growth which is helping the business to perform to expectations.
C&W Communications (CWC) split from the former Cable & Wireless group this year. The remaining business, now called Cable & Wireless Worldwide, warned on profits on Tuesday due to government spending cuts.
"As I highlighted in May, conditions remain challenging in the Caribbean and the trading performance continued to be soft in the first quarter," C&W Communications Chief Executive Tony Rice said in a statement.
"Our focus across the business remains on maintaining and growing market share, managing costs and generating cash to achieve our expected outcome for the year."
The group said the number of mobile subscribers in the Caribbean had risen by 4 percent on the same quarter last year and it maintained market share, but the revenue from each user still fell due to increasing competition.
The average revenue per user in Macau rose due to higher roaming fees from the increasing number of visitors and the use of data services to search the Internet. The Monaco & Islands unit was boosted by a strong performance in the Maldives.
Panama was trading broadly in line with expectations, as an increasing number of mobile subscribers offset the lower revenue per user.
Analysts said the performance was in line with forecasts and said the comments on the Caribbean were no worse than expected.
(Reporting by Kate Holton; Editing by Michael Shields)