Liberty Global sees operating profit drop

Liberty Global CEO, Mike Fries

Liberty Global saw its operating income drop by 30% in the third quarter. Operating income for the quarter was down US$227 million in Europe and by US$340 million in Latin America.

For the first nine months of the year, Liberty posted operating income of UUS$1.452 billion, down 19.3%. Adjusted free cash-flow for the nine months was down 27.1% to US$707 million.

The company added 204,000 organic revenue-generating units in the quarter, which it attributed to its new build programme as well as demand for high-speed broadband and video services. However, the rate of growth was slower than for last year, with additions down 23.7% for the quarter and 12.9% for the year to date.

Liberty in Europe continues to lose video customers at an increasing rate, with 30,800 net losses for the quarter. Broadband and voice customers rose by 132,000 and 102,300 respectively, a lower rate than for the same period last year.

However, Liberty added 216,000 next-generation video subscribers, combining figures for its Horizon, Horizon Lite, TiVo and Yelo bases.

Revenue in Europe was up 2.5% to UKS$3.9 billion, with the UK and Belgium making the most significant contributions to growth. Overall, European residential fixed revenue was flat year-on-year, while mobile revenue grew by a modest 1%. However, business-to-business revenues grew 13% to US$0.5 billion.

President and CEO Mike Fries noted that “the European market remains highly competitive” but added that our investments in the fastest broadband speeds, the coolest video apps and compelling quad-play bundles are allowing us to win share across our footprint”, with revenue-generating unit additions exceeding 600,000 for the year to date.

Fries highlighted Virgin Media’s performance. Liberty Global’s UK unit saw operating cash-flow growth of 4% for the quarter – its best performance this year.

Liberty Global’s soon to be spun-off Latin American business, LiLAC, saw operating income drop US$227 million, with flat revenues. Liberty said that the Latin American business had been hit by the impact of Hurricanes Maria and Irma in the Caribbean, with significant damage to its physical infrastructure in Puerto Rico.

The LiLAC business saw net RGU additions of 40,000 for the quarter, driven by improvements at the Cable & Wireless business and VTR.