News
Cable group’s European operation swings to loss; revenue inches up 1.6%.
Liberty Global announced late Monday its European business swung to a net loss in the second quarter, while revenue inched up just 1.6%, due mainly to weakness in the U.K. and Switzerland.
Revenue at Virgin Media, which serves the U.K. and Ireland, edged up to £1.22 billion (€1.35 billion) in the three months to 30 June, compared to £1.20 billion a year earlier, as strong broadband and TV customer growth was driven by discounting, and its Virgin Mobile subscriber base fell.
"We are seeing some early signs of progress and expect the ARPU headwind in the U.K. to lessen in Q4 this year," said Liberty Global CEO Mike Fries, in a statement.
Revenue at UPC Switzerland/Austria contracted 1.5% year-on-year to €395.4 million, as competition and a higher proportion of lower-spending customers pressured ARPU.
Softness in these operations offset otherwise healthy growth at Liberty’s Belgium, Germany and Central and Eastern Europe units.
Overall, adjusted revenue at Liberty Global’s European business increased 1.6% to $3.66 billion (€3.10 billion). Operating income declined 5% to $483 million, and the company swung to a $637 million net loss for the quarter, compared to year earlier profit of $204 million.
Meanwhile, revenue at Liberty Latin America and Caribbean (LiLAC) surged 52.7% to $920.9 on a reported basis, driven by the acquisition of Cable & Wireless Communications (CWC). Adjusted revenue was up 2%, driven mainly by strong growth in Chile.
LiLAC swung to an operating profit of $159 million from a year earlier loss of $21 million, while net loss narrowed to $22 million from $115 million.
Fries said Liberty Global is on track to spin off LiLAC by the end of the year, and to that effect has filed a draft registration statement with the SEC.
"We believe the spin-off will benefit LiLAC shareholders by creating a standalone, asset-backed equity, while enhancing its potential attractiveness as an acquisition currency for consolidation opportunities in the highly-fragmented Latin American and Caribbean telecommunications markets," he said.
