Liberty Q3 down 30%; UK business improves

Liberty Global has published its Q3 financial and operating results for the Liberty Global Group and the LiLAC Group. The Group’s Q3 operating income (for Europe) was $537 million (€460.5m), representing a decrease of 30 per cent year over year. The decreases in operating income for both periods primarily resulted from the net effect of lower OCF.

CEO Mike Fries stated, “In Europe, we generated better top-line growth in the third quarter underpinned by continued double-digit revenue increases in our B2B business and sequential improvements in the UK and Belgium. Rebased OCF was up 4 per cent in Q3, bringing year-to-date growth to 5 per cent and supporting our guidance of ‘around 5 per cent’ in Europe for the full year.”

“The European market remains highly competitive, but our investments in the fastest broadband speeds, the coolest video apps and compelling quad-play bundles are allowing us to win share across our footprint. Organic RGU additions have exceeded 600,000 YTD, with a 60 per ent improvement in video losses year over year. Meanwhile our mobile business delivered positive revenue growth in Q3, as we drive fixed-mobile convergence and upgrade our MNO networks and MVNO platforms.”

“Virgin Media continues to gain operating momentum with rebased OCF growth of 4 per cent in Q3, which represents our best performance this year. We had another record quarter of Project Lightning construction, which now reaches nearly 1 million marketable homes. The initial response to our November 2017 price increase has been encouraging, with reduced NPS impact and fewer price-related disconnects than a year ago. Growth in our Lightning areas and investment in our core subscriber base with products like the V6 box (now in ~20 per cent of UK video homes) and our WiFi Connect Box (now in >40 per cent of broadband homes), pushed UK RGU additions up to 322,000 YTD, a nearly four-fold increase from two years ago. With new prices taking effect in the fourth quarter we expect ARPU uplift to drive better top-line results in the final months of the year and into 2018.”

Concerning LiLAC, Fries stated, “I am very pleased to have announced Balan Nair as the new President and CEO of our Latin American business. He will add tremendous value and focus, especially as we manage through the damage from Hurricanes Maria and Irma. We’ve begun the work of restoring our fixed and mobile networks in the affected markets, primarily Puerto Rico, as we make good operational strides elsewhere in the region with 40,000 organic RGU additions in Q3. VTR in Chile had a particularly strong quarter across the board, adding 19,000 RGUs while delivering 6 per cent rebased revenue and 9 per cent rebased OCF growth. Our long-term opportunity in Latin America continues to be exciting and we remain on track for the split-off to LiLAC shareholders around the end of the year.”

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