Quad-play drives Liberty Q3
November 4, 2016
Success in quad-play offers and its advanced video offers and OTT services played a role in driving subscriber additions in Europe, according to Liberty Global CEO Mike Fries.
Reporting the company’s Q3 results, Fries said they reflected the acceleration in operating performance that it anticipated in Europe (excluding Ziggo), where it generated over 5 per cent rebased OCF growth. “This result was the by-product of strong performances at Unitymedia and Virgin Media, which posted 7 per cent and 6 per cent rebased OCF growth, respectively, as well as operating efficiencies from our Liberty Go programme. With respect to top-line drivers, our YTD subscriber additions in Europe were up nearly 50 per cent, while customer ARPU in Q3 increased 3 per cent year-over-year,” he advised.
“This growth was due in part to our success with quad-play offers and our advanced video and OTT services. Our B2B business in Europe delivered another quarter of solid results, bringing our YTD rebased revenue growth to 9 per cent. In addition, our new build activities, which are underway in nearly all markets, continue to deliver promising results. At the end of Q3, we had built nearly 850,000 new homes across Europe this year, and we are on pace to deliver over 1.3 million homes by year end. We are confirming our full-year 2016 financial targets for our European business, including better cash flow growth in Q4, but we expect to end up at the lower end of our 4-5 per cent rebased OCF growth range due to the phasing of our new build programme and the impact of certain commercial initiatives in the UK,” he reported.
He said the proposed acquisition of the third largest cable operator in Poland, Multimedia Polska, in October would significantly expand the reach of its market-leading platform in that market, and allow it to drive further efficiencies across its business.
In Europe, the quarter saw YTD organic RGU additions up 47 per cent year-over-year, including 257,000 additions in Q3, supported by a 40 per cent year-over-year decline in video attrition in Q3. Virgin Media generated 92,000 RGU adds, its best Q3 result in seven years.
At the end of Q3, the Liberty Global Group provided 26 million unique customers with 54 million fixedline subscription services (RGUs) across its footprint of 50 million homes passed in Europe. During Q3, it increased its subscriber base by 257,000 organic RGUs, resulting in 22.5 million video, 17.3 million broadband Internet and 14.4 million fixed-line telephony subscribers at September 30, 2016.
Liberty fell into the red in the third quarter thanks to trading losses on derivatives. The company reported a loss of US$249.5 million (€224.8 million), driven by its US$436 million losses on derivatives, compared with a profit of US$133.3 million for the same period last year.
The group posted solid revenue growth, with sales of US$5.2 billion for the quarter, up 1.7% on a like-for-like basis. Operating income was US$902.7 million, up from US$545.5 million.