Virgin lifts Liberty with “its best performance”

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Liberty Global has announced its Q4 and full-year 2017 financial results. The international telco reported full year revenues of $15 billion, $3.9 billion of which were generated in the 4th quarter. This represented a rise of 2.3 per cent on the full year and 2.9 per cent on the 4th quarter. However, operating income for both the year and the quarter plummeted, 21.6 per cent and 27.4 per cent respectively, to total $1.9 billion and $496 million respectively.

Virgin Media, the company’s largest subsidiary, was a key driver of Q$ revenues. In a strong year Virgin delivered 159,000 new premises in Q4 and 536,000 for the year as a whole. During 2017 it added 86,000 Video RGUs, compared with a loss of 36,000 in 2016.

CEO Mike Fries commented: “We ended 2017 on a high note, as we delivered our best rebased revenue growth of the year in Q4, along with 4.5 per cent rebased OCF growth for the full year and $1.6 billion of Adjusted Free Cash Flow4. These results were driven by solid performances in Germany and the UK, together with continued cost efficiencies from our Liberty GO programme.

Virgin Media, our largest operation, steadily improved throughout 2017 and posted 5 per cent rebased OCF growth in Q4, its best performance of the year. We successfully executed the price increase last November and continued rolling out cutting-edge products like our WiFi Connect and V6 set-top boxes, which we will continue to aggressively deploy in 2018. Early last year, we overhauled Project Lightning and subsequently reported progressively improved new build totals, including the delivery of nearly 160,000 premises in Q4 2017, a quarterly record.

In Switzerland, Q4 and full-year OCF results were impacted by costs associated with the launch of MySports, our new sports channel that is available exclusively to cable customers. This investment has transformed UPC Switzerland into the premier provider of televised athletic events, featuring access to Swiss ice hockey and Bundesliga matches. We expect that our OCF results in this market will continue to be under pressure in the coming quarters, as we continue to invest in MySports.

Our balance sheet remains in great shape with an average long-term debt tenor of nearly eight years, a fully-swapped borrowing cost of 4.2 per cent and substantial liquidity of $5 billion. We recently announced a stock repurchase plan of $2 billion for 2018 which, when completed, will push our total buybacks since 2005 above $20 billion.

On the M&A front, a couple transactions have highlighted our continued focus on shareholder value creation. At the end of the year we completed the split-off of our Latin American business, which created two attractive, asset-backed securities. In December, we announced the sale of UPC Austria to T-Mobile Austria at an ~11x EV/OCF exit multiple, highlighting the strategic value of our networks in a rapidly converging world.

Looking ahead, in 2018 we expect to deliver around 5 per cent rebased OCF growth, Adjusted Free Cash Flow of $1.6 billion and P&E additions of $5.1 billion, including $1.2 billion of spend for new build and upgrade for the full year. These investments, which underpin our customer-centric focus, leave us well placed to deliver long-term sustainable growth.”


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