Telecable grows revenues, earnings hit by football costs

Spanish regional cable operator Telecable has turned in respectable Q3 revenues, up 1.5% compared with what UK-based owner Zegona Communications described as a strong prior-year performance, but lower EBITDA thanks to an investment in football.

The Asturias region operator turned in revenues of €34.2 million for the three months to September. However EBITDA took a hit from the cost of football rights. The operator reported Q3 EBITDA of €16 million.

Telecable took a decision earlier this year to secure rights to distribute Mediapro’s beIN La Liga channel, enabling it to offer coverage of La Liga and Copa del Rey football tournaments, alongside national telecom operators Telefonica, Vodafone and Orange. Euskaltel, the other northern Spanish regional cable player, declined to strike a deal at the time on the grounds that the price was too high.

Zegona said that the decision to invest in football had helped grow football subscribers in the Asturias region by 12%.

Telecable’s Q3 cash-flow was up 5.1% to €9.2 million. Zegona said that cash-flow was up 15% before the incremental cost of its investment in football.

Zegona said that Telecable’s mobile and quad-play base was continuing to grow following its new deal with Telefonica to provide 4G mobile data with improved pricing.

“Telecable is succeeding in investing for the future at the same time as it fundamentally improves cash returns.  Our new mobile access agreement with Telefonica enables us to offer our customers a market-leading mobile service, including high speed 4G data, and we believe this will help accelerate growth in highly valuable convergence customers next year and beyond.  The strong Spanish economy and further evidence of price repair in the communications sector, allied with Telecable’s excellent market positioning, gives us confidence that we will continue to deliver strong performance across our key financial metrics for full year 2016 and into 2017,” said Eamonn O’Hare, Zegona Communications’ CEO.

“Beyond Spain, we continue to see a number of attractive new investment opportunities as we look out across the European TMT landscape.  We will evaluate those transactions which can be executed efficiently, enhance shareholder returns, and which satisfy our disciplined financial criteria.”