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KDG ups investment on Tele Columbus disappointment

February 20, 2013

Kabel Deutschland intends to hike its dividend by 67 per cent and increase investment as funds become available after plans to buy Tele Columbus were blocked by the regulator.

Shares in KDG rose 2.5 per cent amid speculation the move could be part of its strategy to deal with a potential bid from mobile giant Vodafone.

Kabel Deutschland said it would raise its dividend to €2.50 per share for the year ending in March, up from €1.50 in the previous year. It said its failed attempt to buy Tele Columbus for €618 million would free up money for the higher dividend as well as for extra investments. The cabler says at least €300 million will be invested over the next two years to accelerate growth.

KDG posted revenue growth of 8.8 per cent to €465 million for its third fiscal quarter to December 31st, with EBITDA of €220 million, up 10.2 per cent.
The company saw its Internet base expand by 84,000, its strongest result to date. The company had 1.856 million phone and internet subscribers at the end of December, up 18.7 per cent. Premium TV subscribers grew by 107,000 in the quarter, comprising 61,000 DVR customers and 47,000 pay TV customers while the overall direct subscriber base grew by 65,000 year-on-year to 7.566 million and total RGUs amounted to 14.1 million, up 6.3 per cent. Total premium TV RGUs now number 1.97 million. Blended ARPU for the third quarter increased by 10.8 per cent year-on-year to €16.05.

KDG said it would increase its dividend to €2.50, up from €1.50 for the previous fiscal year.

Year on year, internet RGUs grew by 295,000 or 20.4 per cent. As of December 31st 2012, KDG reported 1.856 million Internet and telephony subscribers, up by 293,000 or 18.7 per cent year on year. Kabel Deutschland’s new services showed increasing momentum in the third quarter of fiscal year 2012/13. The company added record internet RGUs of 84,000, reaching 1,741,000 on December 31st, 2012.  KDG’s superfast 100 Mbps service had a take up rate of 40 per cent double last year.

In pay TV RGU in the third quarter Kabel Deutschland added 107,000 premium TV RGUs quarter on quarter. At the year-end it had 1,970,000 premium TV RGUs, an annual growth of 422,000 RGUs or 27.3 per cent. The total blended TV ARPU per subscriber increased to €10.43 in the third quarter, up by €0.57 or 5.8 per cent from €9.86 in the previous year’s third quarter.

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