Liberty Q2 down 4% in “unprecedented times”

Liberty Global has published its Q2 2020 financial results.

CEO Mike Fries commented: “Against the backdrop of the Covid-19 pandemic, we continue to effectively navigate through these unprecedented times. Our core focus will always be on ensuring the health and safety of our employees, while delivering an unparalleled connectivity experience for our customers. On that front, our fibre-rich networks continue to perform extremely well despite the surge in usage over the last several months. We understand the importance of seamless connectivity and strive to deliver the best possible products and services to our customers.”

“Customer satisfaction, as measured by net promoter scores, has been at record highs across the majority of our footprint, which translated into our best net customer and broadband additions since Q3 2017. This result was led by a strong performance at Virgin Media, where we added 24,000 customers, our best Q2 result in four years. Fixed-mobile convergence (FMC) continues to drive good mobile growth with over 100,000 post-paid additions, and FMC penetrations reaching 23 per cent, 46 per cent and 22 per cent at Virgin Media, Telenet and UPC Switzerland, respectively.”

“We are making great progress with pre-merger planning for our announced combination of Virgin Media and O2 UK, and are working closely with the European Commission and UK regulators to ensure a smooth review of the transaction.”

“With respect to our financials, Q2 revenue declined by 4 per cent year-over-year and was impacted by approximately $110 million in generally low margin Covid-19 related impacts. As such, our Adjusted EBITDA performance was resilient, ending the quarter effectively flat compared to the prior-year period. And with a continued decline in our capital intensity, we delivered 14 per cent rebased OFCF growth year-over-year.”

“Despite uncertainty regarding the medium-term impact from the Covid-19 crisis, we are reaffirming all of our original full-year guidance metrics. From a balance sheet perspective, we have refinanced over $10 billion of long-term debt YTD, extended our average tenor to over 7 years and lowered our fully-swapped borrowing cost to 4 per cent for the Full Company. As such, our balance sheet remains in great shape with $9.8 billion of total liquidity for the Full Company, including $7.4 billion in cash. During Q2 we remained active on share buybacks, upping our total repurchases to over $750 million spent from mid-February through July.”

Q2 Highlights

• Q2 reported revenue declined 4.5 per cent; rebased revenue decreased 4.3 per cent

• Q2 loss from continuing operations increased 48 per cent YoY to $503.8 million

• Q2 Adjusted EBITDA down 0.2 per cent on a reported basis and 0.4 per cent on a rebased basis to $1.18 billion

• Q2 property & equipment additions were 21.6 per cent of revenue as compared to 24 per cent in Q2 2019

• Built 126,000 new premises during Q2, including 93,000 in the UK & Ireland

• Solid balance sheet with $9.8 billion of liquidity for the Full Company
  • Comprised of $4.4 billion of cash, $3 billion of investments held under separately managed accounts (SMAs) and $2.4 billion of unused borrowing capacity

• Gross and net leverage9 of 5.3x and 3.8x, respectively, on a Full Company basis

• Fully-swapped borrowing cost of 4 per cent on debt balance of $27.7 billion for the Full Company

• Repurchased approximately $750 million of stock through July 31st 2020