Final Results

ANNOUNCEMENT

22 May 2013

CABLE & WIRELESS COMMUNICATIONS PLC

RESULTS FOR THE YEAR ENDED 31 MARCH 2013

Good performance in transformational year

Key Highlights

§ Total Group EBITDA of US$905 million - ahead of prior year and outlook

§ Continuing Group EBITDA of US$589 million - Panama up 8% in H2 versus H1

§ Underlying equity free cash flow up 11%, restated net debt down in H2 to US$1,508 million

§ Group strategy progressed significantly through agreed disposals

§ Paved way for unified business structure

§ Target US$100 million cost reduction and improved Caribbean EBITDA margin

§ Recommended final dividend per share of US2.67 cents, full year dividend per share of US4 cents

Commenting on the Group results, Tony Rice, Chief Executive of Cable & Wireless Communications Plc, said:

"2012/13 has been a milestone year for Cable & Wireless Communications. The agreements to sell our Monaco & Islands and Macau businesses have reshaped the Group and we have achieved the goal of structural coherence that we set ourselves at the demerger of Cable & Wireless in 2010. The Group is now focused on a single region with low penetration for data services and strong growth potential where we have scale and market leadership. This focus will create a more unified, effective and cost-efficient Group. It will enable us to transform how we operate our businesses as we create an organisation structure and operating model that addresses the demands of a data driven market and can be scaled for growth. We have set a new target to drive US$100 million of savings, 13% of our existing operating expenditure, which will improve margins and cash flow, particularly in our Caribbean business.

"In what was a dynamic and busy year I am pleased with our financial performance. EBITDA finished slightly ahead of expectations, mobile data revenue continued to grow across the Group, benefitting from the investments we made in our networks in 2011/12, and our cash generation saw double digit growth year on year. We begin the 2013/14 year with a strong foundation and a clear direction."

Outlook

We are focused on both organic and inorganic opportunities to drive growth in EBITDA and cash generation. For continuing operations we expect:

§ 2013/14 Group EBITDA to be similar to 2012/13

§ US$100 million cost reduction across the Group achieved on a run rate basis within two years

- Anticipated cash cost to deliver between US$150-200 million

§ Caribbean medium term EBITDA margin target of greater than 30%; region with highest proportionate ownership

§ Targeted investment in high speed networks leading to capital expenditure of approximately US$300 million in 2013/14

§ Dividend for 2013/14 of US4 cents a sustainable level capable of progressive growth

Analysis of Group results

During the period, Cable & Wireless Communications announced that it entered into two significant disposal agreements. As a result, the businesses in the Maldives, the Channel Islands and Isle of Man, the Seychelles, South Atlantic, Diego Garcia and Macau have been treated as discontinued operations within the Group's reported results.

Revenue from continuing operations fell by 4% to US$1,942 million. Mobile revenue for the Group was flat on the prior year as strong mobile data growth of 34%, following increased penetration and usage, was offset by declining voice revenue. Our fixed voice and enterprise, data and other revenues were adversely impacted by declining voice traffic, lower activity levels and a difficult macroeconomic environment.

Group EBITDA was in line with the prior year at US$589 million as improved performance in Monaco, following the disposal of Afinis in the first half, was offset by declines in Panama and in the Caribbean, where EBITDA also reduced despite efficiency gains.

Operating profit before exceptional items was the same as the prior period at US$328 million. During the year we took an exceptional restructuring charge of US$50 million related to efficiency initiatives including the initial steps towards the transformation of engineering operations across the Caribbean. In addition, we took an exceptional non-cash impairment charge of US$86 million in the Eastern Caribbean reflecting the more difficult economic climate we face in those markets.

Net profit for the year increased to US$178 million following lower exceptional charges. Adjusted earnings per share for the year were 2% higher than the prior year at US6.6 cents. The Board has recommended a full year dividend of US4 cents per share.

On a constant currency basis, revenue for the Group was 3% lower and EBITDA was 1% higher than the prior year.

Strategy

The agreed disposals of our Monaco & Islands and Macau businesses saw the completion of a key strategic objective set at demerger. This was to create a more structurally coherent Group which enabled both a platform for synergies as well as growth. We have established the foundation from which to grow a leading regionally focused, full service telecommunications operator centred on the growth markets of pan-America. The region has favourable demographics, GDP growth rates that are in excess of developed markets and communications markets with low levels of data penetration. We are well placed to succeed given our leading market positions, extensive networks and connectivity, good working relationships with governments and partners and strong balance sheet. We plan to grow the business within this region both organically and through acquisitions.

In terms of organic development, we have four key strategic priorities.

1. Change operating model - de-layering management, removing the need for a London office and establishing a new combined regional headquarters from which key operational and corporate functions will be based. Unifying our management structure will increase the speed of decision making and put us closer to our operations and customers.

2. Improve efficiency - to further increase the focus on cost out, building on progress made in particular in the Caribbean. We are targeting a US$100 million cost reduction across the Group achieved on a run rate basis within two years and a Caribbean EBITDA margin in excess of 30% in the medium term.

3. Capture data opportunity - ongoing focus on completing the transition to being a data-led telecommunications provider, capturing the growth opportunities that exist within the region.

4. Lead in full service provision - we will continue to invest in and leverage our position as the number one full service operator in pan-America. This will enable the capture of data growth by both extending the range of customers that can be served as well as creating synergies for data delivery through multi-play services.

Our ambition is to grow the business as the leading full service operator in pan-America, with improved margins and increased cash generation enabling greater distributions to shareholders.

Annual results presentation

Cable & Wireless Communications will hold its 2012/13 annual results presentation for analysts and institutional investors at 9:30am BST on Wednesday 22 May 2013.

The presentation will be webcast live on the Cable & Wireless Communications website www.cwc.com. An on-demand version will be available later in the day.

Contacts

REVIEW OF CWC OPERATIONS

Income statement - continuing operations

Panama

·; Mobile revenue up 3%, strong growth in data penetration

·; Data usage more than doubled following launch of high speed mobile data network

·; Strong EBITDA conversion, margin greater than 40%

Revenue at US$586 million was 2% lower than the same period last year as strong mobile growth was offset by lower fixed voice and enterprise, data and other revenues.

Mobile revenue was up 3% to US$323 million. The business maintained market leadership and data penetration of the subscriber base increased to 31%. High data usage, particularly in the prepaid segment due to the availability of short-term flexible plans, resulted in non-voice revenue growth of 47% which more than offset the decline in voice revenue. ARPU grew by 17% as postpaid subscribers were 9% higher and we retained high value prepaid customers whilst promotional activity caused the total number of prepaid subscribers to fluctuate.

Broadband & TV revenue at US$60 million was in line with the same period last year. Our focus remained on the higher ARPU broadband segment and pay TV subscribers grew by 5% on the prior year. The number of pay TV subscribers taking an additional triple-play service increased to 77%.

Fixed voice revenue declined by 10% to US$122 million as mobile competition continued to impact usage and rates.

Enterprise, data and other revenue fell by 10% as a result of delayed government programmes in Panama. During the year we were awarded a government contract to supply, install and support new systems to share documents electronically and a contract to introduce a Hospital Information System to improve administration and patient care in state funded hospitals.

Gross margin as a percentage of revenue was 1% higher than last year as growth in higher margin mobile offset reduced enterprise, data and other revenue which is typically lower margin.

Operating costs at US$158 million were 8% higher than the prior year reflecting higher network costs following the expansion of our mobile network and greater utility costs.

As a result of higher operating costs, EBITDA of US$239 million was 7% lower compared to the prior year, however we saw an increase of 8% in second half performance compared to the first half. EBITDA as a percentage of revenue was 41%.

Our proportionate ownership of Panama EBITDA for the year ended 31 March 2013 was 49%.

Caribbean

·; Mobile non-voice revenue growth of 28% following investment in high speed mobile data networks

·; Jamaica mobile subscriber growth of 16% year on year

·; Continued strong performance in the Bahamas

·; Fibre network build out commenced in Barbados and Cayman

·; Cost reduction progress - headcount down 12% and Jamaica field force outsourced

Revenue in our Caribbean business at US$1,120 million was down 4% on the prior year, consistent with the decline in the first half of the year.

Mobile revenue of US$527 million was 1% down on the prior year driven principally by lower ARPU. Subscriber numbers were broadly flat on the prior period with growth in Jamaica following regulatory changes which enabled us to improve our competitive positioning, stimulating subscriber and usage growth offset by churn in the Eastern Caribbean. We have seen sustained growth in mobile data usage following the launch of high speed networks in a number of islands during the year and plan to expand on this where commercially viable.

Broadband & TV revenue was down 2% at US$120 million. We launched LIME TV in Barbados during the year and have signed up over 3,000 subscribers to date with plans to roll out IP based TV services to a number of islands in the coming year.

Fixed voice revenue at US$290 million was 10% down compared to the prior year. Voice substitution continued across the region, although the ARPU and revenue decline this year was mainly influenced by Jamaica where regulatory changes and the introduction of a special telecommunications tax led to lower revenues.

Enterprise, data and other revenue at US$183 million was down 7% on last year due principally to a lower level of cable capacity sales in the period.

Gross margin as a percentage of revenue remained stable.

Operating costs were 5% down compared to the prior year at US$578 million. Across the Caribbean business we have embarked on targeted cost reduction programmes to improve efficiency and build a sustainable operating base. During this year our headcount has reduced by 12% to 3,421 and we have further outsourced our field force technician services in Jamaica. Much of the improvement has come from our Bahamas business which has seen a full year's benefit of the restructuring we undertook following acquisition of the company in 2011.

EBITDA for the Caribbean was US$274 million representing a 4% reduction from the prior year.

Our proportionate ownership of Caribbean EBITDA for the year ended 31 March 2013 was 72%.

Revenue at US$236 million was 5% lower than the prior year on a constant currency basis driven primarily by a reduction in transit traffic volumes. Despite the introduction of competition, our mobile customer base grew by 9% as we launched new tariffs and focused on non-voice revenue. This more than offset declining voice revenue and resulted in overall mobile revenue growth of 3% at constant currency. Subscriber growth led to a 7% increase in broadband & TV revenue on a constant currency basis.

Gross margin at US$139 million was 2% higher than the prior year on a constant currency basis as improved mobile gross margin, driven by lower outpayments, offset lower total revenue.

Operating costs of US$64 million were 22% lower at constant currency primarily due to the disposal of Afinis in August 2012.

EBITDA at US$75 million was 39% higher than the prior year at constant currency and 27% higher on a reported basis reflecting lower operating costs.

Other includes management, royalty and branding fees, the costs of the corporate centre, net UK defined benefit pension credit and intercompany eliminations. EBITDA for the year was US$1 million after adjustments to reflect the classification of the Islands and Macau businesses as discontinued operations. This was US$10 million higher than the prior year following a pension credit related to the Cable & Wireless Superannuation Fund (CWSF) and reduced costs in the corporate centre.

Our share of profit after tax from joint ventures was US$10 million, US$16 million lower than the same period last year primarily due to customer migration costs in TSTT following the introduction of a 4G/HSPA+ high speed mobile data network and the impact of increased competition on Roshan.

We have now completed our second year of investment in The Bahamas having invested around US$100 million in capital projects during that period. We continue to focus on providing an improved service to our customers and preparing for future market competition.

Depreciation and amortisation at US$275 million remained in line with the pre-exceptional charge in the prior year.

Other Group items

Net other operating income/(expense)

The US$4 million net other operating income received in the year comprised a foreign exchange translation gain of US$8 million related to UK pension schemes partially offset by US$4 million of hurricane related costs in the Caribbean.

Net exceptional items (excluding impairments) of US$50 million related to redundancy and restructuring programmes in the Caribbean. The prior year charge of US$66 million was primarily in respect of restructuring activities in The Bahamas and Panama.

Exceptional impairment and depreciation charges

We recognised a non-cash impairment charge of US$86 million in the year ended 31 March 2013. This was mainly due to the difficult environment in the Eastern Caribbean indicated in our Q3 results. The prior year charge consisted of a non-cash impairment and accelerated depreciation charge of US$244 million primarily due to poor financial performance in Jamaica.

Net finance expense

The US$141 million net finance expense for the Group included finance income of US$11 million (US$10 million in 2011/12) and finance expense of US$152 million (US$158 million in 2011/12). The reduction in finance expense compared to the prior period mainly reflected the absence of the non-cash Monaco put option interest partially offset by foreign exchange losses.

Other non-operating (expense)/income

The US$16 million other non-operating expense reflected the loss on the disposal of Afinis. In the prior year, the income of US$13 million was in respect of gains on disposals.

Income tax expense

The income tax charge for the continuing Group of US$41 million (US$49 million in 2011/12) was in respect of overseas taxes. This charge represented an effective tax rate of 36% pre-exceptional items. Removing the impact of non-deductible interest charged on the Group's central borrowing facilities this charge represented an effective tax rate of 24% pre-exceptional items.

We expect the Group effective tax rate in 2013/14, pre-exceptional items and excluding non-deductible interest charged on the Group's central borrowing facilities, to be around 25%.

Revenue, EBITDA, capital expenditure and operating cash flow bridge

1Balance sheet capital expenditure excludes transfer of cable assets from inventory

Our Islands businesses comprising operations in the Maldives, the Seychelles, the Channel Islands and Isle of Man, South Atlantic and Diego Garcia had a good year with revenue and gross margin up 1% compared to the prior year driven by strong mobile and broadband & TV growth.

Macau achieved another record year of EBITDA performance driven by increased mobile data usage where revenue was up 43% on the prior year and higher mobile roaming revenue.

Group cash flow

The Group generated operating cash flow before exceptional items of US$326 million for the year ended 31 March 2013, 18% higher than the prior year as capital expenditure reduced following previous heavy investments in mobile data networks within key markets. There was a net outflow in working capital and provisions whilst investment income of US$23 million included proceeds from the sale of investments, interest received on cash balances and dividends received from joint ventures.

Fixed charges

We paid US$74 million relating to underlying income tax in 2012/13, US$4 million higher than the prior year. Interest of US$129 million was paid on our external borrowings. We paid dividends to non-controlling interests of US$106 million in the period, which was US$13 million higher than the prior year due to increased distributions from Monaco prior to closing of the Islands transaction.

Underlying equity free cash flow of US$141 million, or US5.6 cents per share, was up 11% relative to the prior year driven by reduced capital expenditure. On the current dividend of US4 cents per share this represented underlying cash dividend cover of 1.4 times.

Non-recurring items and exceptionals

The net cash outflow included US$26 million for exceptional items related to redundancy and restructuring programmes in the Caribbean. We also incurred additional borrowing costs of US$27 million due to the timing of refinancing our 2012 sterling unsecured bond.  A tax legislation change during 2012/13 in Panama led to the timing of payments being brought forward and as a result there were US$37 million of additional cash tax payments in the year.

Group consolidated cash and debt

During the year the sterling unsecured bonds repayable in August 2012 were redeemed at par using cash balances and drawings on the US$600 million revolving credit facility. The revolving credit facility has a margin of 2.50% over LIBOR and a maturity date of October 2016. As at 31 March 2013, US$360 million of this facility was drawn. Following closing of the Islands transaction on 3 April 2013, all outstanding drawings on the revolving credit facility and US$25 million of other borrowings were repaid.

Pro forma net debt as at 31 March 2013 after receipt of the disposal proceeds for the Islands (including the Seychelles) and Macau businesses was US$140 million. This figure includes an adjustment for net cash attributable to minority interests in the disposed businesses.

Pensions

As at 31 March 2013, the defined benefit section of the Cable & Wireless Superannuation Fund (CWSF) had an IAS 19 deficit of £86 million, compared to a deficit of £81 million as at 31 March 2012.

Cash contributions have been agreed with the trustees in order to eliminate the actuarial deficit, however these payments are subject to the outcome of the actuarial valuation as at March 2013. This future deficit funding constitutes a minimum funding agreement and, in accordance with accounting standards, we are required to account for this within our IAS 19 deficit. The IAS 19 deficit recorded at 31 March 2013 represents the present value of the maximum amount committed under the minimum funding agreement.

The increase in the deficit in the year is mainly due to a fall in the corporate bond rate used to discount liabilities. The AA corporate bond rate used in calculating the pension deficit was 4.5% compared with 4.9% at 31 March 2012.

The fund assets at 31 March 2013 were approximately invested 73% in the bulk annuity policy, 18% in equities, and 9% in bonds, property, swaps and cash.

There are other unfunded pension liabilities in the UK of £30 million (£26 million at 31 March 2012). The Group holds investments in gilts of £24 million to partially back the UK unfunded pension liabilities. Other schemes in Cable & Wireless Communications have a net IAS 19 surplus of US$19 million (US$30 million surplus at 31 March 2012).

Dividend

For the financial year 2012/13 the Board is recommending a final dividend of US2.67 cents per share. This represents two-thirds of our previously announced intention to pay a full year dividend of US4 cents per share.

For 2013/14 the Board has confirmed that, subject to financial and trading performance, it expects to recommend a dividend of US4 cents per share, a sustainable level capable of progressive growth.

Subject to shareholder approval, the final dividend will be paid on 9 August 2013 to ordinary shareholders on the register at the close of business on 31 May 2013.

A currency option and the dividend reinvestment plan will be offered in respect of the final dividend. The default currency for payment is sterling. Shareholders wishing to receive their dividend in US dollars or wishing to participate in the dividend reinvestment plan should make an election using CREST Input Message or return a completed Currency Mandate Form or Dividend Reinvestment Plan Mandate Form to: Equiniti Ltd, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, by 12 July 2013. Copies of the mandate forms are available from Equiniti Ltd, UK callers: 0871 384 2104; overseas callers: +44 (0)121 415 7052 or from our website www.cwc.com.

The sterling dividend payment amount per share will be announced on 18 July 2013, and will be based on the prevailing sterling to US dollar exchange rate at 2:00pm BST on that date.

Post balance sheet events

On 3 April 2013, CWC completed the sale of the majority of the Islands sub-group to Batelco as part of a transaction described in note 3 of the appendices and received total cash proceeds of US$601 million in respect of these disposals. This represents consideration of US$470 million for the Islands sub-group plus US$31 million of net cash in the disposed businesses attributable to CWC, together with US$100 million in respect of the 25% shareholding in Compagnie Monegasque de Communication SAM (CMC), the holding company of the Group's interest in Monaco Telecom.

In April 2013, the cash proceeds were used by the Group to repay US$360 million of the revolving credit facility and US$25 million of other borrowings.

Strategic alliance with Columbus Networks Ltd

On 13 May 2013, CWC announced it had entered into a strategic alliance with Columbus Networks Ltd to develop its international wholesale capacity business.

Update on disposals

Following receipt of the required consents and approvals the Group completed the sale of its businesses in the Maldives, the Channel Islands and Isle of Man, South Atlantic and Diego Garcia. Regulatory approval for the transfer of CWC's business in the Seychelles has not yet been obtained however we are not aware of anything that would prevent completion of this transfer.

We have had interaction with the Principality of Monaco on the required transfer consents for the remaining 75% of CMC to Batelco and the feedback has not been as positive as we expected. Whilst we continue to liaise with the Principality in relation to the transaction with Batelco, CWC and Batelco are also considering the alternative options available given the uncertainty of receiving the required approvals.

We are making good progress towards obtaining the approvals required for completion of the Macau disposal. We continue to expect the transaction to close between July and October 2013.

Appendices

Extracts from the financial statements and additional information:

Consolidated income statement 14

Consolidated statement of comprehensive income 15

Consolidated statement of financial position 16

Consolidated statement of changes in equity 17

Consolidated statement of cash flows 18

Reconciliation of loss for the year to net cash generated 19

Additional information 20

Operating performance information

2012/13 CWC constant currency results detail 25

H2 2012/13 CWC reported results detail 26

H2 2012/13 CWC constant currency results detail 27

KPI detail 28

Exchange rates 29

Extracts from the financial statements and additional information

Consolidated income statement

\* The results of Islands sub-group and Macau has been presented in discontinued operations (note 3)

1Includes discontinued operations

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Consolidated statement of cash flows

for the year ended 31 March 2013

The reconciliation of loss for the year to net cash generated was as follows: