News Corp.'s Sky Deutschland Posts First Operating Profit in Five Years
UPDATED: The German pay TV giant exceeded analysts' expectations in the second quarter.
LONDON - German pay TV giant Sky Deutschland, in which Rupert Murdoch's News Corp. is the main shareholder, on Tuesday reported improved quarterly financials as it swung to its first operating profit in years.
Second-quarter revenue grew 18 percent to €327 million ($404 million) as earnings before interest, taxes, depreciation and amortization swung to a positive €23 million ($28 million) from a year-ago loss of €23.5 million.
This was the first positive EBITDA number the company has posted in five years, and the first one since it started using the "Sky" brand name in 2009, UBS analyst Polo Tang said. The company previously did business under the name "Premiere."
Lower Bundesliga costs due to the German soccer league's end of the season helped the quarterly results.
The company added 47,100 net subscribers, ahead of the average analyst estimate of 40,000 and the year-ago gain of 33,000. That left the company's subscriber base at 3.13 million as of mid-year.
Mobile video service Sky Go recorded 6.9 million subscriber logins in the latest quarter, up from 1.3 million in the second quarter of 2011.
The company, in which News Corp. owns a 49.9 percent stake, confirmed its outlook that 2012 EBITDA would be "significantly better" than in 2011, with 2013 showing a positive EBITDA figure.
“This has been an important quarter for Sky," said Sky Deuschland CEO Brian Sullivan. "We have achieved a number of major milestones across the business, including long-term agreements with key studios and sports rights partners, as well as the first positive EBITDA under the Sky brand. Demand for Sky’s expanded range of products and services is accelerating as our absolute focus on customers delivers the high-quality content, leading innovations and top service they deserve. While there is still more to
do, both the momentum in our business and the potential in the market are stronger than ever.”