As Hurricane Beryl wreaked havoc across Jamaica and other islands, Flow, a leading regional telecommunications provider, found itself in the eye of the storm. The aftermath of the hurricane resulted in a significant insurance payout, estimated at a staggering US$44 million. However, despite the financial impact, Liberty Latin America, the parent company of Flow, remains confident in their ability to manage the situation.
Here are some key points to consider in the wake of Hurricane Beryl’s impact on Flow and Liberty Latin America:
- Liberty Latin America CEO Balan Nair reassured stakeholders that the insurance coverage for the damages caused by Hurricane Beryl is manageable. This highlights the company’s commitment to addressing the challenges posed by natural disasters.
- The hurricane primarily affected markets where Flow operates, such as Jamaica, Grenada, and St Vincent and the Grenadines. Despite this, over 90% of fixed and mobile coverage in these markets remains operational and continues to grow, showcasing the resilience of Flow’s infrastructure.
- The company’s utilization of “weather derivatives” enabled them to expect a net third-party payout of approximately US$44 million. This innovative approach to risk management proves beneficial in mitigating the financial impact of unforeseen events like Hurricane Beryl.
- Flow anticipates adverse subscriber and financial impacts in the aftermath of the hurricane, particularly in 2024. The company estimates a negative impact on revenue and adjusted operating income, with the most significant strain expected in the third quarter.
- To address the damage caused by the hurricane, C&W Caribbean plans to incur capital costs of approximately US$10 million to US$20 million. These investments are crucial for replacing damaged infrastructure and equipment and enhancing network resilience against future natural disasters.
- The rapid payout from the weather derivative is expected to expedite the company’s recovery process, underscoring the importance of efficient risk management strategies in times of crisis.
The aftermath of Hurricane Beryl serves as a stark reminder of the vulnerabilities faced by telecoms infrastructure in hurricane-prone regions. By leveraging innovative solutions like weather derivatives and investing in resilient network infrastructure, companies like Flow and Liberty Latin America can navigate the challenges posed by natural disasters while ensuring the continuity of their services.
