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Hurricane Beryl has triggered insurance claims for Flow operations in Jamaica and some islands estimated at $44 million, the parent company of the region’s telecommunications services provider said.
“The overall impact is manageable,” Liberty Latin America CEO Balan Nair said of insurance coverage.
Liberty Latin America owns Flow through subsidiary Cable & Wireless Communications Plc, also known as C&W Caribbean.
Nair said hurricanes in July caused damage to Jamaica, Grenada and St. Vincent and the Grenadines, markets where Flow has operations.
“In our impacted markets, over 90% of fixed and mobile coverage is online and continuing to grow,” he said of the recovery.
Liberty said in its latest second-quarter earnings report that Beryl triggered its weather derivatives and that the company “expects to receive approximately $44 million in net third-party gains, which will be reflected in derivatives income in its financial statements.” That figure is equivalent to about $7 billion in local currency.
“We are still assessing the impact Hurricane Beryl has had on our families and customers,” the company said.
The weather derivatives reflect quantities related to the severity of a Category 5 hurricane, not evidence of damage.
Jamaica, which hosts the majority of Flow’s regional telecom assets, has 1.2 million mobile subscribers, or 60 percent of the network’s 1.95 million subscribers in the Caribbean.
“We anticipate adverse user and financial impacts for the remainder of 2024 as a result of Hurricane Beryl,” Liberty said.
In the six months from January to June this year, C&W Caribbean Cruises generated $733 million in revenue, with operating income up 4%.
The company estimates that its revenue and OIBDA (adjusted operating income before depreciation and amortization) will be negatively impacted by $10 million to $20 million for the remainder of the year. This financial pressure will be most evident in the third quarter and will depend largely on how quickly power is restored in the affected areas.
In addition, the company expects to incur approximately $10 million to $20 million in capital costs for property and equipment. The company said these costs are necessary to “replace infrastructure and equipment that was damaged beyond repair or to enhance network resiliency” to prepare for future natural disasters. The extent of the damage highlights the vulnerability of telecommunications infrastructure in areas prone to hurricanes and other extreme weather events.
Derivatives are expected to pay out faster than other forms of insurance, thereby helping to achieve a quicker recovery. (Jamaica Gleaner)
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