ITV write-down puts BSkyB into the red
EmptyLONDON -- Satcaster British Sky Broadcasting slid into the red Wednesday, posting first half net losses of 196 million pounds ($384.3 million) compared to profits of 130 million pounds a year earlier, following its earlier write-down of 342 million pounds ($670.6 million) relating to the slide in value in its stake in ITV.
Revenue for the six months to December 2007 was up 11% to 2.5 billion pounds ($4.9 billion) while average revenue per customer was a record 421 pounds ($825). Adjusted operating profit for the first half was 307 million pounds ($601.9 million).
The write-down, which has been signaled to the markets last week, reflected the collapse in ITV's share price to around half the 1.35 pounds per share that Sky paid for the 17.9% stake in November 2006.
Announcing his first set of results, chief executive Jeremy Darroch insisted that Sky had made "good progress" during the first six months of the year despite the write-down and that the underlying business was "on track" to achieve 10 million subscribers by 2010.
The satcaster added 162,000 net new customers over the six-month period, compared to 183,000 in the same period a year ago, bringing its total to 8.8 million at the end of December.
Churn rates, the number of customers who quit the service, fell back to 10%, which was below analyst forecasts.
BSkyB added 260,000 broadband customers over the period, almost double its total of 149,000 a year ago, bringing the total number of Internet customers to 1.2 million at the end of December.
Customers taking its DVR product Sky Plus, which allows viewers to record programs and skip adverts, grew by 434,000 to 3.1 million homes.
Earlier this month business and enterprise secretary John Hutton ordered BSkyB to sell down its stake in ITV to below 7.5%. In a conference call with analysts, Darroch said the satcaster was "carefully considering" how to respond to the decision. BSkyB has four weeks to decide whether to mount an appeal.