Liberty Global reported slow sales growth in Europe for a second quarter, hurt by weakness in mobile markets, the UK and Switzerland. Underlying revenues were up just 1.6 percent year-on-year to USD 3.664 billion, and reported revenue fell 18 percent due to the deconsolidation of its Dutch activities. The company said Virgin Media was hurt by discounts and slow sales, but the impact should start to lessen from Q4.
Operating cash flow rose 6.0 percent to USD 1.733 billion, supported by growth at Unitymedia in Germany, Telenet in Belgium and the CEE countries. The cable operator said it still expects to meet its full-year outlook for 5 percent growth in underlying operating cash flow.
Operating profit fell 5.0 percent to USD 483 million, and the net result moved to a loss of USD 637 million from a profit of USD 204 million a year ago.
Capital expenditure increased to USD 1.204 billion from USD 1.099 billion, led by the company's efforts to expand its footprint. Virgin Media especially showed a record build in June and added 127,000 new homes passed in the quarter. Across the group, 295,000 homes passed were added in Q2 and 500,000 since the start of the year.
In Europe, organic RGU net additions slowed to 161,900, down 37.5 percent from the year-earlier period, with growth coming mainly in the UK/Ireland and Germany. Liberty Global said softer broadband (+100,100) and voice (+77,000) growth was partially offset by better video trends (-16,100). Losses in prepaid meant mobile added just 5,800 customers in the quarter. The company also added 91,000 customers with the takeover of SFR in Belgium in mid-June.
In Latin America, Liberty Global said it was on track to spin off its Lilac holding company by year-end. A draft registration statement was filed with the SEC in July. Lilac is expected to contribute around USD 1.5 billion in operating cash flow this year.
