Liberty Global ups cash-flow guidance on solid results following UK JV completion

Liberty Global has turned in a respectable set of Q3 results, enabling the company to up its free cash-flow guidance for the year. The company added 266,000 net broadband and post-paid mobile subscribers in the quarter.  

The company reported the loss of 5,400 customers in the quarter to September, but has added 24,600 over the full nine months period, driven by organic customer net additions of the new UK JV with Telefónica, VMO2, through to the June 1 closing of that transaction, after which numbers for the UK outfit were counted separately.

Liberty’s revenues for the quarter amounted US$1.9  billion, down 33% as a result of the VMO2 transaction. Adjusted EBITDA was down 35% to US$758 million.

The new UK JV’s contribution of £300 million meant that Liberty was able to upgrade its free cashflow outlook to US$1.45 billion.

VM02 added 38,000 fixed-line customers (broadband, TV or home phone) in Q3 taking the total fixed-customer base to 5.7 million. Broadband subscribers rose by 42,000 in Q3

The company dded 686,000 total mobile connections in the quarter (including Wholesale customers). Virgin Media O2’s total mobile connections now stand at 42m.

Covergence is bearing fruit in the UK, where over 40% of broadband customers also take a mobile plan.

VM02’s total transaction adjusted revenue increased 0.7% YoY to £2.6 billion in Q3, accounted for in Liberty’s numbers as Us$3.6 billion. Adjusted EBITDA decreased 0.6% YoY to £913 million, excluding £11.0 million of opex cost.

Separately,  Virgin Media Ireland has announced plans to upgrade its broadband network to full fibre, commencing in early 2022. The company also revealed it has already  piloted a fibre upgrade of 500 premises, delivering speeds of up to 10Gbps, with the plan now to extend to one million premises nationwide. The project is expected to take three years to complete.

“Q3 marked the first full quarter of operations for all four of our converged national champions, as we continue demonstrating strong commercial momentum across the group. Operationally, we added 266,0001 aggregate broadband and postpaid mobile subscribers during the quarter driven by continued execution of our convergence strategies,” said CEO Mike Fries.

Analysts at Jefferies noted that Q3 was “overall solid enough in a transaction quarter” for the company, and observed that `”customer intake looks strong in the UK, if unremarkable elsewhere”.

Jefferies noted that UK revenue growth was “driven mainly by strong device sales (launch of attractive models), weighted down by declining service revenues”.