Liberty Latin America Q4 hurt by hurricane fallout

Liberty Latin America extended its net loss in 4Q17 on the impact of the hurricane season in the Caribbean, which was partially offset by strong operating income from the Chile operations.

In its first income statement as a separate company following its spin-off in December from Liberty Global, Liberty Latin America posted a net loss of US$401mn compared to US$107mn in Q416.

Revenues fell 8% to US$850mn, with income declining 1% and 84% in Liberty's Cable & Wireless (C&W) and Liberty Puerto Rico operations, respectively.

Chile's cable operator VTR was the only bright spot with a 10% increase in revenues to US$250.3mn.

Full-year revenue grew 32% to US$3.59bn.

The Q4 decline reflected the negative effects of Hurricanes Irma and María in Puerto Rico and other Caribbean nations, with a negative impact of US$90mn for Liberty Puerto Rico and US$7mn for C&W during the quarter. For full-year 2017, the negative impact of this natural event was US$109mn and US$10mn.

C&W

C&W's revenues declined 3% in Q4, impacted by a new competitor in the Bahamas and lower fixed-line revenue in Caribbean markets. The revenue decline was due to the impact of the hurricanes, lower carrier revenue in Jamaica, and lower B2B revenue in Panama. This was offset by strong mobile growth in Jamaica, higher penetration of high-speed fixed services in Panama and Jamaica, and growth in the wholesale capacity business.

CWC added 30,000 revenue generating units (RGUs) in the quarter, including 21,000 broadband and 6,000 fixed telephony. Mobile subscribers declined by 42,000, as 23,000 additions in Jamaica were offset by a loss of 61,000 in Panama where the company is focusing on higher Arpu clients.

VTR CHILE

Chile's VTR saw a 10% increase in revenues to US$250mn, with boosts in revenue and subscribers for residential cable and mobile services.

While the fixed-line voice base declined, the company saw 17,000 new broadband subscribers, helped by increases in basic speeds over the last year, and 9,000 new mobile subscribers.

LIBERTY PUERTO RICO

Liberty Puerto Rico saw an 84% decline in revenue and a 65,000 decline in its subscriber base in Q4 due to the effects of the hurricanes.

The company said it expects the fallout from Hurricane María to have an adverse impact on financial performance in 2018 due to infrastructure rebuild. As of February 8, some 450,000 RGUs had been reconnected.

In BNamericas' recent Operator Series on Liberty Latin America, analysts concluded that despite the impact of the hurricanes, the financials of the newly spun-off company are essentially sound.

The company announced this week that it has reached an agreement to acquire 80% of Costa Rican cable company Cabletica.

"Our recently announced acquisition in Costa Rica is a clear example of the high quality assets available in the region and the potential for us to add value through the application of our operating model," CEO Balan Nair said in a statement.