Euskaltel posts second quarter results following strategy shift

Spanish regional cable operator Euskaltel reported a modest increase in revenues and EBITDA but a sharp decline in net profits for the first half as the effects of its new Zegona Communications-driven strategic roadmap begin to kick in.

José Miguel García

Euskaltel said it had successfully grown its “high-value” customer base in the second quarter. The company added 4,000 net new customers during the three months to June, taking its total to 772,000, which it said was largely down to geographical expansion beyond its core markets of the Basque Country, Asturias and Gallica into Navarre, Rioja, Cantabria and Catalonia.

Euskaltel added 43,000 product sales in the quarter, taking its total to 2.8 million products under contract. The company added 24,000 post-paid mobile lines, 7,000 broadband customers and 10,000 pay TV subscribers in the quarter. TV penetration now accounts for over 60% of the company’s base. Fixed voice customers grew by 3,000.

Euskaltel had 1.15 million post-paid mobile customers, 587,000 broadband customers and 465,000 pay TV customers. Fixed voice customers numbered 621,000.

Service revenues for the quarter were up 1.3% to €136.9 million.

Euskaltel’s now leading shareholder Zegona Communications recently gave an upbeat assessment of Euskaltel’s prospects in what remains a highly competitive market, following a restructuring of the management team under new CEO José Miguel García.

The company has restructured its three core regional operating companies into a single business and cut the executive team headcount by 25%. The company is ramping up plans to expand its footprint outside its northern regional home markets.