Ziggo reports ‘solid start’ to 2014, with Q1 growth fuelled by internet and business bundles
Apr 16, 2014
16 Apr 2014
Dutch cable TV and broadband provider Ziggo has published its financial results for the three months ended 31 March 2014, reporting a 1.7% year-on-year increase in revenue to EUR394.2 million (USD544.5 million), from EUR387.8 million a year ago, thanks to continued growth in its broadband internet and mobile telephony business and the success of its business-to-business (B2B) sales campaigns; excluding the impact of Esprit Telecom (acquired in May 2013) and ‘other revenue’ however, the y-o-y revenue growth was a more modest 0.8%. The group booked adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of EUR213.1 million, down 4.3% on an annualised basis and 4.7% lower, excluding Esprit. Operating income dipped 13.2% to EUR134.4 million from EUR154.8 million and a net income (loss) of EUR38.4 million reversed a net profit of EUR92.9 million booked in Q1 2013. The altnet attributed the turnaround to one-off costs of approximately EUR93 million net of taxes related to the refinancing, intended acquisition and ‘fair value losses on its hedges’. On the operational front, Ziggo closed out March 2014 with a total of 7.216 million revenue generating units (RGUs), up a net 30,000 quarter-on-quarter and 1.7% higher y-o-y. Of the total, Ziggo said that 1.558 million RGUs were bundle subscribers, taking more than one service, while 6.951 million RGUs were ‘consumer’ users. At the same date Ziggo’s network passed 4.250 million homes in the Netherlands, up 3,000 y-o-y, where it served a total of 2.784 million TV customers (2.796 million at 1Q13), 1.948 million broadband internet subscribers (1.910 million) and 1.627 million telephony subscribers (1.608 million). In addition, Ziggo reported 30,000 net new additions to its Ziggo Mobile brand in Q1 2014 for a total of 63,000. The altnet says that based on its ‘strong network and appealing product offerings’, it will continue to focus on its top-line in 2014, which it says will be facilitated primarily by continued expansion of the broadband internet, Ziggo Mobile and B2B business segments. In terms of outlook, Ziggo said: ‘As we anticipate no easing of the current competitiveness in the market, we will continue investments in sales and promotions, customer retention and product development to strengthen our position and improve our services. We expect these additional investments, which will be skewed towards the first half of the year, to result in a flat EBITDA for 2014 compared to last year.’ As previously reported by CommsUpdate, in January this year UK-based international cable TV and broadband group Liberty Global agreed to acquire the remainder of Ziggo for EUR6.9 billion in a cash and shares transaction. Liberty Global, which already owns 28.5% of Ziggo, plans to merge the operator with its existing Dutch cable business UPC.