Virgin Media First-Quarter Profit Rises, Subscriber Momentum Slows
LONDON - British cable operator and mobile phone giant Virgin Media on Wednesday reported a big jump in its first-quarter profit, but posted weaker subscriber momentum in core product categories.
The largest U.K. cable company, which competes with BSkyB and is being acquired by John Malone's Liberty Global for $16 billion, added 24,500 net new consumer cable product contracts in the quarter after a gain of 72,800 in the same quarter last year. As part of that, it lost 13,400 cable TV subscribers, reversing a year-ago net gain of 12,200. It ended March with a total of 3.78 million cable TV subscribers.
Paying TV customers increased by 13,700 to 3.3 million though after a gain of 50,600 in the same period last year. Some of Virgin Media's TV customers have free TV packages.
The company also signed up 37,400 broadband customers, down from 45,700 in the year-ago period. Overall, Virgin Media added 8,600 new consumer cable customers, compared with 21,200 in the year-ago period, ending March with a total user base of 4.9 million.
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Virgin Media grew its quarterly profit to $212 million (£139 million), compared with $10.7 million (£7 million) in the year-ago period. It said that the improvement was "mainly due to increased gain on derivative instruments, reduced loss on extinguishment of debt and reduced interest expense, partially offset by $11.9 million (£7.8 million) of merger-related costs."
Earnings before interest, taxes, depreciation and amortization and other one-time charges was rose 8 percent to $619 million (£406 million). Revenue rose 3.6 percent to $1.6 billion (£1.04 billion).