Sky Deutschland reported strong customer growth and record retention levels in Q1, but said its EBITDA earnings slid to negative €8.6 million.
The results come after Sky Deutschland reported positive full year EBITDA for the first time in 2013 in its last earnings call, though it said that it expects to repeat this in full-year 2014, with EBITDA expected to fall in the range of €70m to €90m, supported by a “continued strong increase” in total revenues.
Sky’s subscriber base increased by 64,000 year-on-year in the quarter, reaching a total of 3.73 million at the end of March. Gross additions were 145,000, which Sky said reflected the expanding underlying demand for Sky’s products. Meanwhile quarterly annualised churn rate decreasing to 8.8% – the lowest in the company’s history.
“We had a strong start to 2014. Never before has Sky seen higher levels of customer loyalty. With solid gross additions, churn rates at record lows and a steadily growing number of customers across all product categories, we have clearly shown the increasing appeal of our outstanding entertainment offering,” said Sky Deutschland CEO Brian Sullivan.
Sky finished the quarter with 2.11 million Premium HD customers and 1.58 million Sky+ customers. Some 443,000 also subscribed to a second smartcard.
In terms of online offerings, Sky said that the number of customer sessions for Sky Go grew significantly by 58% to reach 24 million over Q1 2014.
Total revenues grew by 16% year-on-year to €421 million, driven by higher subscription numbers and revenues. However, costs rose year-on-year to €429 million due to Bundesliga rights costs. EBITDA for the quarter was negative €8.6 million, compared to positive €5.8 million for the same quarter last year, while net income for the first quarter amounted to negative €53 million.