Rodney Davis, president and CEO of Cable and Wireless Jamaica. - File

Cable and Wireless Jamaica's net profits shot up to $523 million or three cents per share, in its second quarter to September 30, boosted the company said by increased business in its Internet segment.

The company's stock gained seven cents this week since the release of its results, closing at $0.92 on Wednesday.

But even with the 44 per cent jump for the quarter, plus a billion-dollar increase in revenue, C&WJ's six month performance, $888 million of profit, was three per cent below the matching period for 2005 when they netted $919 million.

Outpayments to companies on whose network its calls terminate was up by $500 million to $3.3 billion, and 'other cost of sales' also doubled to $1.08 billion, eroding $4.4 billion off the $12.12 billion in sales made by the company over six months.

Mobile usage

The quarter was a lot kinder to the telecom provider.

"Revenues in the quarter increased more than 14 per cent due to increases in mobile usage and the continued acquisition of ADSL subscribers," said C&WJ in a statement accompanying its filing with the Jamaica Stock Exchange.

"Further savings were also achieved through reduced operating expenses as a result of lower administrative, marketing and selling and staff costs, which were partially offset by increases in mobile outpayments."

The company's operating expenses dipped by $200 million to $5.96 billion, resulting in healthier operating profit, which rose from $1.69 billion to $1.9 billion.

Higher turnover

Revenue for the September quarter was up 14 per cent to $6.2 billion, occasioned the company said by a 180 per cent increase in its ADSL subscriber base relative to the 2005 period.

The higher turnover, complemented by a cut in operating expenses, also pushed operating and net profits above year ago levels.

Operating profit of $1.08 billion for the quarter represented a 66 per cent gain on last year's $650 million.

"For the quarter, Internet revenues increased by 77 per cent and by 121 per cent on a year to date basis when compared to the same period last year. This growth has been achieved despite the threat of other competitor's entry to the Internet space," said C&WJ.

The company also reported gains in its mobile business, saying revenue increased by 30 per cent in three months and 27 in six.

business@gleanerjm.com

TAKEN FROM THE FINANCIAL GLEANR, NOVEMBER 17, 2006