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Virgin Media boosts Liberty Global in mixed quarter

Virgin Media’s performance helped Liberty Global beat analysts’ expectations on revenue growth in the fourth quarter, with the UK cable operator turning in rebased revenue growth of 4.4% thanks in part to the expansion of its footprint. However, Liberty saw slower subscriber growth in a number of markets.

Virgin Media built out its network to an additional 159,000 premises in the fourth quarter, taking the total number of homes passed by its Project Lightning network construction initiative to over 1.1 million. The company added 336,000 revenue-generating units over the year, up 34%, with 74% of these being accounted for by Project lightning. However, Q4 RGU additions slowed to 8,000 with new adds from Project Lightning being offset by slower growth in its existing footprint.

Liberty Global as a whole posted full-year rebased revenue growth of 2% for the full-year, with Q4 growth of 3% being boosted by mobile and B2B growth as well as Virgin Media.

Revenue for the year, now excluding Liberty Latin America, was US$17.3 billion (€13.9 billion).

Liberty Global saw its operating income slide by 22% for the full year to US$1.95 billion, which the company said was due to lower operating cash-flow and a decline in depreciation and amortization.

Operating cash-flow was down thanks to the deconsolidation of Liberty’s Dutch operation, lower organic cash-flow growth and the impact of currency movements.

On the operational side, Liberty lost 54,500 video subscribers in Q4, almost half of the loss for the total year. Data subscribers grew by 116,000 and voice subscribers by 87,700, leading to a net revenue-generating unit gain of 149,200, significantly lower than for the same period in the prior year. Gains were lower across the board for the full year in all markets except the UK, and the company saw negative growth in Belgium and the combined Swiss-Austrian operation.

Liberty added 210,000 subscribers o its Horizon, Horizon Lite, TiVo, Virgin TV V6 and Yelo TV advanced TV platforms in the fourth quarter, taking its advanced TV total to 7.7 million, or 43% of its total cable video base.

“We ended 2017 on a high note, as we delivered our best rebased revenue growth of the year in Q4, along with 4.5% rebased OCF3 growth for the full year and US$1.6 billion of adjusted free cash flow . These results were driven by solid performances in Germany and the UK, together with continued cost efficiencies from our Liberty Go programme,” said Liberty Global president and CEO Mike Fries.

The now split-off Liberty Latin America meanwhile saw its results for the year hit by the ongoing impact of Hurricanes Irma and Maria in the Caribbean, which had a serious negative impact on its Puerto Rican operation. The company posted revenue of US$3.6 billion for the year, down 2.1% on a rebased basis, and an operating loss of US$148 million, compared with a profit of US$319 million for the prior year.