FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of: January 19, 1999
------------------
TRICOM, S.A.
(Translation of registrant's name into English)
AVENIDA LOPE DE VEGA NO. 95, SANTO DOMINGO, DOMINICAN REPUBLIC
(Address of principal executives offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby furnishing
the information to the Commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned
to the registrant in connection with Rule 12g3-2(b): 82-_________
<PAGE>
[TRICOM LOGO]
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION CONTACT:
Jaime Garcia Robin Weinberg / Jennifer Rogovin
TRICOM, S. A. DEWE ROGERSON
Ph (809) 476-4054 Ph (212) 688-6840
e-mail: [email protected] e-mail: [email protected]
--------------------- --------------------------
[email protected]
-------------------------
TRICOM ANNOUNCES FOURTH QUARTER AND YEAR-END 1998 RESULTS
REPORTS HIGHEST REVENUES AND EARNINGS TO DATE
(Santo Domingo, Dominican Republic, January 19, 1999)
TRICOM (NYSE:TDR), today announced the unaudited results of operations for its
fourth quarter and year ended December 31, 1998.
FOURTH QUARTER AND YEAR-END OPERATING HIGHLIGHTS:
. OPERATING REVENUES reached US$ 35.2 million for the 1998 fourth quarter, a
33.8% increase over 1997 fourth quarter revenues of US$ 26.3 million. For
1998, operating revenues increased by 39.3% to US$ 125.5 million from US$
90.1 million for 1997.
. NET EARNINGS were up 455.6% to US$ 5.7 million for the 1998 fourth quarter,
or US$ 0.23 per share, compared to net earnings of US$ 1.0 million, or US$
0.06 per share, for the 1997 fourth quarter. During 1998, net earnings rose
by US$ 14.9 million, or 492.3%, to US$ 17.9 million compared with earnings
before extraordinary item of US$ 3.0 million in 1997. Earnings per share
increased to US$ 0.78 in 1998 as compared to earnings per share before
extraordinary item of US$ 0.17 in 1997.
. OPERATING MARGIN increased to 23.1 % and 23.5% for the 1998 fourth quarter
and 1998, respectively, from 20.6% and 17.6% for the 1997 fourth quarter and
1997, respectively.
. OPERATING DATA. Local access lines grew by 86.6% to 80,616 at December 31,
1998 from 43,195 local access lines at December 31, 1997. Cellular
subscribers increased by 164.0% to 108,532 at December 31, 1998 compared to
41,107 at December 31, 1997. International long distance minutes increased
by 46.8% to 231.1 million minutes in 1998 from 157.4 million minutes in
1997.
. EBITDA increased 45.6% to US$ 15.0 million for the 1998 fourth quarter from
US$ 10.3 million for the 1997 fourth quarter, with margins increasing to
42.8% in the 1998 fourth quarter from 39.3% in the 1997 fourth quarter.
EBITDA in 1998 increased by 70.4% to US$ 53.7 million compared to US$ 31.5
million in 1997, with margins increasing to 42.8% from 35.0%, respectively.
1
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Arturo Pellerano, Chairman and CEO, stated, "In 1998, TRICOM reinforced its
presence as a leading provider of telecommunication services. Our strong
management team and highly trained personnel are the reason we continue to
exceed expectations. Going forward, we will strive to continue to provide value
to our shareholders, through strong growth and increased profitability".
OPERATING REVENUES for the 1998 fourth quarter increased by 33.8% to US$ 35.2
- ------------------
million from US$ 26.3 million for the 1997 fourth quarter. The Company
attributes this growth to increased installation, cellular, and local service
revenues associated with the Company's local network expansion, as well as
increased international settlement revenues generated by its U.S. based
subsidiary, TRICOM USA. During the 1998 fourth quarter, the Company surpassed
the 218,000 customer mark, more than doubling its year-end 1997 subscriber base.
INTERNATIONAL SETTLEMENT REVENUES grew by 21.7% to US$ 13.7 million for the 1998
- ---------------------------------
fourth quarter compared to US$ 11.2 million for the 1997 fourth quarter. The
growth of inbound traffic volume generated by TRICOM USA contributed to this
increase in international revenues. The number of inbound minutes generated by
TRICOM USA increased by 53.7% in the 1998 fourth quarter over the same period in
1997. This increase was achieved despite a 10.8% decrease in settlement rates to
an average rate of US$ 0.199 per minute for the 1998 fourth quarter from US$
0.223 per minute for the 1997 fourth quarter. Inbound minutes increased by 46.8%
during the 1998 fourth quarter over total inbound minutes in the 1997 fourth
quarter. Total international long distance minutes increased by 46.8% to 231.1
million in 1998 compared to 157.4 million in 1997.
LOCAL SERVICE REVENUES increased by 71.9% to US$ 3.7 million for the 1998 fourth
- ----------------------
quarter from US$ 2.2 million for the 1997 fourth quarter, as a result of the
Company's local access subscriber growth, combined with a higher average monthly
rate charged to customers. During the 1998 fourth quarter, the Company added
8,969 net local access lines compared to 8,200 net local access lines added
during the same period of 1997. As of December 31, 1998, the Company had 80,616
local access lines in service compared to 43,195 local access lines in service
at December 31, 1997.
CELLULAR REVENUES were up by 39.0% to US$ 5.6 million during the 1998 fourth
- -----------------
quarter compared to US$ 4.0 million for the same period in 1997 primarily as a
result of a higher average cellular subscriber base. This increase can also be
attributed to a 27% increase in the average price per outgoing airtime minute to
US$0.28 in the 1998 fourth quarter from US$ 0.22 in the 1997 fourth quarter. The
Company added 19,542 net cellular subscribers during the 1998 fourth quarter
compared to 10,978 net cellular subscribers during the 1997 fourth quarter. The
number of cellular subscribers increased by 164% to 108,532 at December 31, 1998
from 41,107 at December 31, 1997. Airtime minutes increased by 17.1% in the 1998
fourth quarter to 24.9 million minutes from 21.3 million minutes in the 1997
fourth quarter. The Company attributes the substantial increase of its cellular
subscriber base to the continued growth of its Amigo prepaid cellular program
introduced in the third quarter of 1997.
INSTALLATION REVENUES grew by 48.7% to US$ 3.2 million for the 1998 fourth
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quarter from US$ 2.1 million for the 1997 fourth quarter. This increase is a
result of the Company's increased market penetration and continued growth in the
2
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number of local access line installations and cellular activations. During the
fourth quarter of 1998, the Company installed 10,903 gross local access lines
and activated 26,156 cellular subscribers, compared to 9,321 gross local access
lines installed and 14,417 cellular subscribers activated during the 1997 fourth
quarter.
OPERATING COSTS increased 29.7% to US$ 27.0 million for the 1998 fourth quarter
- ---------------
compared to US$ 20.8 million for the 1997 fourth quarter but declined to 76.9%
of total operating revenues for the 1998 fourth quarter from 79.4% for the same
period in 1997. The increase in operating costs was primarily attributable to
increases in general and administrative expenses, depreciation, and expense in
lieu of income taxes. General and administrative expenses increased by 47.7% to
US$ 10.2 million for the 1998 fourth quarter from US$ 6.9 million for the same
period in 1997, primarily as a result of higher sales commissions, personnel
costs due to a higher number of employees, and other expenses.
OPERATING INCOME totaled US$ 8.1 million for the 1998 fourth quarter, up 49.7%
- ---------------
from US$ 5.4 million in the 1997 fourth quarter. As a percentage of total
operating revenues, operating income improved to 23.1% for the 1998 fourth
quarter compared to 20.6% for the 1997 fourth quarter. In 1998, operating income
grew by 85.9% to US$ 29.5 million from US$ 15.9 million in 1997, with margins
improving to 23.5% from 17.6%, respectively.
NET EARNINGS increased by US$ 4.7 million to US$ 5.7 million, or US$ 0.23 per
- ------------
share, for the 1998 fourth quarter compared to US$ 1.0 million, or US$ 0.06 per
share, for the 1997 fourth quarter. In 1998, net earnings increased by US$ 20.3
million to US$ 17.9 million, or US$ 0.78 per share, compared to a net loss of
US$ 2.4 million, or US$ (0.14) per share during 1997. The net loss in 1997
reflected a write-off of US$ 5.5 million in the third quarter related to the
early retirement of indebtedness with the proceeds of the offering of TRICOM's
11 3/8% Senior Notes due 2004. Earnings before extraordinary item totaled US$
3.0 million, or US$ 0.17 per share in 1997. Net earnings accounted for 16.3% of
total operating revenues for the 1998 fourth quarter compared to 3.9% of total
operating revenues for the 1997 fourth quarter, evidencing the continued growth
of the Company's profitability driven by its local access network expansion and
international business.
EBITDA grew by 45.6% to US$ 15.0 million for the 1998 fourth quarter from US$
- ------
10.3 million for the 1997 fourth quarter. As a percentage of total operating
revenues, EBITDA improved to 42.8% for the 1998 fourth quarter compared to 39.3%
for the 1997 fourth quarter. In 1998, EBITDA totaled US$ 53.7 million, a 70.4%
increase from US$ 31.5 million in 1997. This increase reflects the Company's
improved operating performance as a result of higher operating margins from its
cellular, local service and international businesses.
TRICOM is a full service telecommunications provider in the Dominican Republic,
and has long distance operations in the United States. Since it began operations
in 1992 as a low-cost international long distance service provider, the Company
has expanded its services to include basic local service, national long
distance, cellular, paging and Internet access.
For additional information, please visit TRICOM's website at
http://www.tricom.net or contact our Investor Relations department at the above
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numbers.
3
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The statements contained in this press release which are not historical facts
are forward-looking statements that involve risks and uncertainties. Management
cautions the reader that these forward-looking statements are only predictions;
actual events or results may differ materially as a result of risks facing the
Company. Such risks include, but are not limited to the following factors:
competition; declining rates for international long distance traffic; opposition
to increased rates for basic local service; the Company's significant capital
expenditure requirements and its need to finance such expenditures; the
inability of the Company to expand its local access line network in a timely
manner and within the amount budgeted for such capital expenditure program; the
inability of the Company to manage effectively its rapid expansion; the
continued growth of the Dominican economy, demand for telephone services in the
Dominican Republic and moderation of inflation; and the continuation of a
favorable political and regulatory environment in the Dominican Republic.
(Five tables to follow)
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The following tables set forth comparative operating information for the three
month and year-end periods ended December 31, 1997 and 1998.
<TABLE>
<CAPTION>
======================================== ============ ============ ============= ========
SUMMARY OF OPERATING INFORMATION 4Q'97 4Q'98 VARIATION %
======================================== ============ ============ ============= ========
<S> <C> <C> <C> <C>
Local access line additions, net 8,200 8,969 769 9.4%
Cellular subscriber additions, net 10,978 19,542 8,564 78.0%
Airtime minutes 21,288,096 24,923,429 3,635,333 17.1%
International long distance minutes 48,570,990 69,634,023 21,063,033 43.4%
Domestic long distance minutes 4,080,484 5,865,048 1,784,564 43.7%
======================================== ============ ============ ============= ========
FYE'97 FYE'98 VARIATION %
======================================== ============ ============ ============= ========
Total lines in service (at period end) 43,195 80,616 37,421 86.6%
Cellular subscribers (at period end) 41,107 108,532 67,425 164.0%
Airtime minutes 74,537,535 93,996,089 19,458,554 26.1%
International long distance minutes 157,410,602 231,074,783 73,664,181 46.8%
Domestic long distance minutes 13,007,883 20,183,190 7,175,307 55.2%
Number of employees (at period end) 989 1,341
======================================== ============ ============ ============= ========
</TABLE>
The following table sets forth the percentage contribution of each category of
revenues to total operating revenues and certain items in the statement of
operations expressed as a percentage of total operating revenues for the three
month and year-end periods ended December 31, 1997 and 1998.
<TABLE>
<CAPTION>
======================================= =========== ============ ========== ======
OPERATING REVENUES 4Q'97 4Q'98 FYE'97 FYE'98
======================================= =========== ============ ========== ======
<S> <C> <C> <C> <C>
Toll 16.5% 12.3% 17.2% 14.1%
International settlement 42.7% 38.8% 43.8% 40.1%
Local service 8.3% 10.6% 7.1% 10.3%
Cellular 15.4% 16.0% 14.5% 16.2%
Paging 4.9% 2.8% 5.6% 3.6%
Sale and lease of equipment 4.1% 3.7% 6.1% 3.3%
Installations 8.1% 9.0% 5.6% 10.3%
Other 0.0% 6.7% 0.0% 2.1%
- --------------------------------------- ----------- ------------ ---------- ------
Operating costs 79.4% 76.9% 82.4% 76.5%
Operating income 20.6% 23.1% 17.6% 23.5%
Interest expense, net -17.3% -7.1% -13.4% -8.4%
Earnings before extraordinary item 3.9% 16.3% 3.4% 14.3%
Net earnings 3.9% 16.3% -2.7% 14.3%
EBITDA 39.3% 42.8% 35.0% 42.8%
======================================= =========== ============ ========== ======
NOTE: Percentages do not add up to 100% due to rounding
</TABLE>
5
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<TABLE>
TRICOM, S.A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN US$)
<S> <C> <C>
ASSETS DECEMBER 31, 1997 DECEMBER 31, 1998
----------------- -----------------
(AUDITED) (UNAUDITED)
Current assets:
Cash and cash equivalents US$ 5,732,505 US 15,377,410
Accounts receivable:
Customers 5,612,123 9,168,740
Carriers 5,546,399 4,153,003
Related parties 625,248 163,110
Officers and employees 200,294 275,069
Current portion of long term
accounts receivable 281,382 75,072
Other 3,525,123 2,113,227
--------------- ---------------
15,790,569 15,948,221
Allowance for doubtful accounts (668,827) (740,687)
--------------- ---------------
Accounts receivable, net 15,121,742 15,207,534
Current portion of pledged securities 22,750,000 54,470,478
Inventories, net 5,633,477 8,687,356
Prepaid expenses 2,518,052 2,921,680
--------------- ---------------
Total current assets 51,755,776 96,664,458
Long-term accounts receivable 966,592 91,556
Unearned interest (204,576) -
--------------- ---------------
Long-term accounts receivable, net 762,016 91,556
Investments:
Pledged securities 53,018,390 -
Others 1,796,521 2,164,387
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Total investments 54,814,911 2,164,387
--------------- ---------------
Property and equipment cost 223,581,951 365,682,963
Accumulated depreciation (20,604,355) (35,226,515)
--------------- ---------------
Property and equipment, net 202,977,596 330,456,448
Other assets at cost, net of
amortization 10,833,238 15,437,754
TOTAL ASSETS US$ 321,143,537 US$ 444,814,603
=============== ===============
6
<PAGE>
TRICOM, S.A.
CONSOLIDATED BALANCE SHEET
(IN US$) DECEMBER 31, 1997 DECEMBER 31, 1998
----------------- -----------------
(AUDITED) (UNAUDITED)
LIABILITIES & SHAREHOLDERS EQUITY
Current liabilities:
Notes payable:
Borrowed funds-banks US$ 5,905,005 US$ 21,665,516
Borrowed funds-related parties 4,849,818 25,591,915
Current portion of long term debt
- Carifa Loan - 32,000,000
---------------- ------------
10,754,823 79,257,431
Accounts payable:
Carriers 2,327,768 3,106,898
Suppliers 17,746,637 11,772,957
Other 1,023,478 519,076
---------------- ------------
21,097,883 15,398,931
Other liabilities 3,039,761 7,236,243
Accrued expenses 12,017,371 15,127,010
---------------- ------------
Total current liabilities 46,909,838 117,019,615
Reserve for severance indemnities 140,641 42,886
Long-term debt:
Carifa Loan 32,000,000 -
Senior Notes 200,000,000 200,000,000
---------------- ------------
Total liabilities 279,050,479 317,062,501
Shareholders equity:
Class A Common Stock at par value
RD$10:Authorized 55,000,000 shares;
5,700,000 shares issued at
December 31, 1998 - 3,750,000
Class B Stock at par value RD$10:
Authorized 22,517,095 shares at
December 31, 1997 and 22,944,544
shares at December 31, 1998;
19,390,528 shares issued at
December 31, 1997 and 19,144,544
issued at December 31, 1998 43,357,343 12,785,895
Additional paid-in-capital, excess
over par - 94,015,852
Legal reserve 600,233 600,233
Retained earnings 3,147,997 718,290
Period net income (loss) (2,429,707) 17,905,589
Equity adjustment for foreign
currency translation (2,023,757) (2,023,757)
---------------- ---------------
42,652,109 127,752,102
Less treasury stock at cost,
245,985 shares (559,051) -
---------------- ---------------
Shareholders equity, net 42,093,058 127,752,102
TOTAL LIABILITIES &
SHAREHOLDERS EQUITY US $321,143,537 US$ 444,814,603
=============== ===============
</TABLE>
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All share and per share data set forth below reflect the reclassification of the
Company's shares of Common Stock that were outstanding prior to TRICOM's initial
public offering of American Depository Shares into shares of Class B Stock and
give effect to an approximate 3.3132-for-one stock split at that time. The
financial data set forth below at and for the year-ended December 31, 1998 are
unaudited and are subject to normal recurring year-end adjustments.
<TABLE>
TRICOM, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(IN US$)
THREE MONTH PERIOD ENDED
DECEMBER 31,
-------------------------------
1997 1998
------------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
OPERATING REVENUES:
Toll US$ 4,327,178 US$ 4,316,934
International settlement 11,225,138 13,655,632
Local service 2,177,480 3,743,175
Cellular 4,050,289 5,629,007
Paging 1,283,210 971,111
Sale and lease of equipment 1,083,921 1,315,732
Installations 2,121,811 3,156,105
Other 2,071 2,365,879
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TOTAL OPERATING REVENUES 26,271,098 35,153,575
OPERATING COSTS:
Satellite connections and carriers 8,156,671 8,875,208
Network depreciation 2,192,347 3,157,642
Expense in lieu of income taxes 1,877,977 2,842,049
General and administrative expenses 6,904,077 10,194,250
Depreciation expense 835,137 917,989
Other 881,359 1,050,124
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TOTAL OPERATING COSTS 20,847,568 27,037,262
OPERATING INCOME 5,423,530 8,116,313
OTHER INCOME (EXPENSES):
Interest expense (7,639,048) (3,684,271)
Interest income 3,094,522 1,190,223
Foreign exchange gain (loss) (404,686) 595,302
Other 559,370 (474,097)
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TOTAL OTHER EXPENSES (4,389,842) (2,372,843)
------------- ------------
EARNINGS BEFORE EXTRAORDINARY ITEM 1,033,688 5,743,470
Extraordinary Item - early
extinguishment of debt - -
NET EARNINGS US$ 1,033,688 US$ 5,743,470
============= ============
EBITDA US$ 10,328,991 US$ 15,033,993
EARNINGS PER SHARE BEFORE
EXTRAORDINARY ITEM US$ 0.06 US$ 0.23
EARNINGS PER SHARE US$ 0.06 US$ 0.23
WEIGHTED AVG. NUMBER OF SHARES
OUTSTANDING 17,600,360 22,944,544
TWELVE MONTH PERIOD ENDED
DECEMBER 31,
-------------------------------
1997 1998
------------- -------------
(AUDITED) (UNAUDITED)
OPERATING REVENUES:
Toll US$ 15,510,968 US$ 17,644,573
International settlement 39,432,385 50,332,088
Local service 6,411,831 12,941,983
Cellular 13,073,309 20,363,647
Paging 5,079,103 4,527,579
Sale and lease of equipment 5,502,276 4,114,513
Installations 5,070,888 12,936,817
Other 21,246 2,640,192
------------- -------------
TOTAL OPERATING REVENUES 90,102,006 125,501,392
OPERATING COSTS:
Satellite connections and carriers 31,270,652 32,308,880
Network depreciation 7,432,818 11,382,446
Expense in lieu of income taxes 6,248,317 9,561,710
General and administrative expenses 23,675,136 36,139,674
Depreciation expense 1,956,121 3,239,714
Other 3,659,422 3,391,347
------------- -------------
TOTAL OPERATING COSTS 74,242,466 96,023,771
OPERATING INCOME 15,859,540 29,477,621
OTHER INCOME (EXPENSES):
Interest expense (16,100,251) (15,725,526)
Interest income 4,053,079 5,133,348
Foreign exchange gain (loss) (705,983) 456,105
Other (83,097) (1,435,959)
------------- -------------
TOTAL OTHER EXPENSES (12,836,252) (11,572,032)
------------- -------------
EARNINGS BEFORE EXTRAORDINARY ITEM 3,023,288 17,905,589
Extraordinary Item - early
extinguishment of debt (5,452,995) -
NET EARNINGS US$ (2,429,707) US$ 17,905,589
============= =============
EBITDA US$ 31,496,796 US$ 53,661,491
EARNINGS PER SHARE BEFORE
EXTRAORDINARY ITEM US$ 0.17 US$ 0.78
EARNINGS PER SHARE US$ (0.14) US$ 0.78
WEIGHTED AVG. NUMBER OF SHARES
OUTSTANDING 17,600,360 22,944,544
</TABLE>
8
<PAGE>
TRICOM, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN US$)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------- --------------
1997 1998
(AUDITED) (UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers US$95,947,087 US$ 124,237,923
Cash paid to suppliers and employees (35,238,305) (76,611,135)
Cash received from (paid to) related parties (458,291) 462,138
Interest paid (15,367,463) (15,930,102)
Interest received on deposits 2,342,088 5,133,348
Expense in lieu of income tax (5,908,420) (9,561,710)
Other income (expenses), net (2,221,565) (979,856)
------------ ---------------
Net cash provided by operating activities 39,095,131 26,750,606
Cash flows from investing activities:
Acquisition of investments (75,967,805) -
Current portion of investments - (31,720,478)
Cancellation of investments - 52,650,525
Acquisition of property and equipment (92,667,874) (142,101,011)
------------ ----------------
Net cash used in investing activities (168,635,679) (121,170,964)
Cash flows from financing activities:
Borrowed funds from banks - 15,760,511
Principal payments to banks (36,410,367) -
Borrowed funds from related parties 1,393,728 20,742,097
Principal payments to related parties (15,626,945) -
Decrease in short terms obligations (2,235,955) -
Issuance (redemption) of short-term bonds (7,061,768) 32,000,000
High yield bond issue 200,000,000 -
Long-term debt (28,000,000) (32,000,000)
Issuance of common stock 20,000,000 67,562,655
------------ ----------------
Net cash provided by financing activities 132,058,693 104,065,263
Effect of exchange rate changes on cash (1,077,444) -
Net increase in cash and cash equivalents 1,440,701 9,644,905
Cash and cash equivalents at beginning of the year 4,291,804 5,732,505
Cash and cash equivalents at end of period US$ 5,732,505 US$ 15,377,410
============ ================
</TABLE>
# # #
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
TRICOM, S.A
Dated: February 1, 1999 By: /s/ Carl H. Carlson
-------------------
Carl H. Carlson
Executive Vice President
and Member of the
Office of the President
10
