The Tribune

By NEIL HARTNELL

Tribune Business Editor

CABLE Bahamas yesterday said it was "a bit surprised" by the unseasonal 55 per cent electricity cost increase it suffered during its 2012 first quarter, although this was offset by a 23 per cent revenue rise driven by its new fixed-line voice business.

Barry Williams, the BISX-listed communications provider's senior vice-president of finance, told Tribune Business that whereas in past years the company, in common with other Bahamian businesses, had become used to a drop in oil prices - and therefore a subsequent lowering of electricity bills - during the winter months, the opposite occurred in early 2012.

"I was a bit surprised, I must say, although not too surprised, on the electricity side of things," he confessed. "That continues to increase. The fuel surcharge is absolutely incredible.

"In the winter months in the past we tended to see a bit of a drop off, but instead of previous trends, it was an increase. When we look at it quarter-over-quarter between the years, it was over a 55 per cent increase. It is a significant increase."

Cable Bahamas' cost base for the three months to end-March 2012 was also negatively impacted by further increases in programming costs.

"Programming costs, on average, for the quarter, year-over-year, probably increased more than 18 per cent," Mr Williams told Tribune Business.

"That is pretty much ongoing. Depending on the supplier, typically they increase anywhere from 2 per cent to 15/20 per cent..... We continue to work with our suppliers to get discounts where we can. That's as much as we can do. We don't control it as we don't own the programming. It we want to carry it, we have to pay the rates."

As a result, Cable Bahamas' total operating expenses increased by 24.7 per cent year-over-year, rising to $15.641 million from $12.539 million. Revenues, though, compensated for this by increasing 23.5 per cent to $27.864 million, up from $22.57 million a year ago.

Mr Williams told Tribune Business that Cable Bahamas enjoyed subscriber growth across all its business units during the three months to end-March 2012, led by its ReVoice fixed-line voice service segment. This skewed year-over-year comparisons, as Cable Bahamas had not entered this market in the 2011 first quarter, its Systems Resource Group (SRG) acquisition not yet complete.

"The main growth was on the voice side," Mr Williams confirmed. "We didn't have it the year before. It was 5 per cent of the growth factor year-over-year. Certainly, voice was the largest contributor."

Elsewhere, Cable Bahamas enjoyed about 1 per cent subscriber growth on its basic cable TV product, while its Caribbean Crossings/Maxil business segments combined generated about 5 per cent growth.

"Premium TV is still looking good for us, and the other businesses are holding their own. A bit of organic growth is still continuing," Mr Williams said.

"A lot of this has to do with us coming through a recessionary period. Economic conditions are still a bit iffy, but we're starting to see some recovery in relation to subscribers and subscribers taking some additional services. But it's still a tough sell in this economy right now.

"We think that as the economy improves, discretionary services will pick up. They were better than the year before."

Cable Bahamas had unveiled a 37.4 per cent net income increase to $6.339 million for the 2012 first quarter, up from $4.614 million during the same period in 2011.

Operating income was up 27.1 per cent at $7.854 million, compared to $6.178 million in 2011.