Liberty Global posts loss as subscriber dip and inflation hit, VMO2 sees strong Q1

Liberty Global’s earnings moved into negative territory in Q1, with a loss of US$713.5 million from continuing operations. Adjusted EBITDA was down by 6% to US$624.5 million.

The company was hit by a combination of subscriber losses and rising energy and labour costs in the quarter.

The company has meanwhile announced that it planned to change jurisdiction from England and Wales to Bermuda to avoid “complex English corporate laws” and align with its US NASDAQ listing and expectations of US shareholders.

Liberty Global’s operating units in different European countries were hit by a falling fixed-line phone and TV customer base.

The company lost 36,900 TV customers in the quarter with a particularly big loss in Belgium, although it also added subscribers, notably through Telenet acquisition of Eltrona in Luxembourg.

Internet subscribers nudged upwards by 3,600 in the territories of Switzerland, Belgium, Ireland, Slovakia and Luxembourg. Virgin Media O2 in the UK added 28,800 broadband subs while VodafoneZiggo in the Netherlands lost 8,500.

Overall, Liberty Global’s customer base dropped by 16,500 over the quarter, compared with losses of 3,900 for the same period a year ago. This was despite significant gains in mobile, particularly in Switzerland.

At the end of March, Liberty Global had 9.181 million revenue-generating units, with Virgin Media O2 adding 13.003 million and VodafoneZiggo 8.653 million.

Virgin Media O2 was the star performer in the wider Liberty Global constellation. The UK JV added 28,800 broadband and 297,000 total mobile connections in the quarter. VMO2 saw revenues rise by 3.9% to £2.6 billion and adjusted EBITDA go up by 2% to £950 million.

Liberty Global itself posted revenues of US$1.868 billion for the quarter, up 1%, while adjusted EBITDA came in at US$624.5 million. CEO Mike Fries said that the adjusted EBITDA dip had been signalled in February and was related to the time of price increases and the impact of cost inflation.

“Our Q1 performance demonstrates that the need for reliable high-quality connectivity remains strong across our footprint. This commercial momentum supports our commitment to investing in our market-leading fixed and mobile networks and driving product innovation to ensure an exceptional customer experience,” said Fries.

“While Q1 saw an anticipated step up in the impact of energy and labor costs on our core FMC businesses, we are taking reasonable price adjustments to sustain robust operating margins alongside digital initiatives and continued synergies. As a result, we are in a strong position to deliver for our shareholders in 2023, supported by our ample liquidity and our 10% minimum buyback commitment.”