Revenue at U.S.-based cable group’s European ops falls 17.9% on forex losses, poor performance in U.K.
Liberty Global has lowered its full-year outlook after its European business got off to a poor start to 2017.
Revenue in Europe for the three months to 31 March fell 17.9% year-on-year to $3.52 billion (€3.21 billion), driven by foreign exchange losses, the deconsolidation of its Netherlands operation into the Vodafone Ziggo joint venture with Vodafone, and a 10.8% decline at its U.K. and Ireland business, Virgin Media.
This resulted operating cash flow (OCF) declining 19.5% to $1.60 billion. Operating income fell to $431 million from $527 million a year earlier.
"In terms of our European financials, we had a soft start to the year on the revenue front," conceded Liberty Global CEO Mike Fries, in a statement on Sunday.
"While most markets reported results consistent with our forecasts, Virgin Media’s cable ARPU was softer than planned, partly due to discounting and mix effect, as well as a decline in mobile revenue," he said.
U.S.-based Liberty Global now expects full-year OCF growth of 5%, compared to its previous forecast of 6%-7%.
Despite the financial weakness, Liberty Global’s European business saw strong growth in revenue generating units (RGUs).
The group added 244,300 RGUs during the quarter, with the Virgin Media accounting for 158,000 of them. Germany added 52,400, and its Central and Eastern European operations added 48,300. Belgium and Switzerland/Austria saw net losses of 12,000 and 2,400 respectively.
Liberty Global ended March with 45.02 million RGUs.
Meanwhile, Liberty Global’s Latin America and Caribbean business, called LiLAC, generated first-quarter revenue of $910.9 million, compared to $303.9 million a year earlier, thanks to the contribution of recently-acquired Cable & Wireless Communications (CWC).
LiLAC added 41,900 RGUs during the quarter, leaving it with 5.42 million in total.