Virgin Media Swings to Third-Quarter Profit Amid Improved Subscriber Momentum
LONDON - British cable operator Virgin Media on Tuesday swung to a third-quarter profit amid improved subscriber momentum.
The company added a total of 39,500 net new customers in the quarter, up from 6,300 in the same quarter last year. As part of that, it signed up 10,700 new pay TV customers, reversing a year-ago loss of 5,700.
The company also added 205,900 TiVo users, bringing the total number to 1.14 million, or about 30 percent of the total user base. "While TiVo demand remained strong, we managed the mix between new and existing customers to optimize returns, resulting in lower net additions than in the previous quarter," the company said.
The number of broadband customers rose by 56,900 to 4.2 million, more than double the number of year-ago additions. Virgin Media ran ads featuring Olympic running stars Mo Farah and Usain Bolt in recent weeks.
Virgin Media swung to a profit of £123.9 million ($198.4 million), compared with a loss of £73.8 million ($118.2 million) in the year-ago period. "The improvement was mainly due to a third quarter gain of £44.0 million ($70.5 million) on derivative instruments this year compared to a £59.3 million ($94.95 million) loss in the third quarter last year," the firm said.
Revenue rose 2.8 percent from £1 billion ($1.60 billion) to nearly £1.03 billion ($1.65 billion).
"This has been a quarter where continued strong demand for superfast broadband and TiVo has led to lower churn and meaningful cable customer growth," said Virgin Media CEO Neil Berkett. "Combined with progress in our business division, we have again delivered solid financial progress."
In the coming weeks, the cable company said it would launch an enhancement to its Virgin Media TiVo service that will be dubbed Virgin TV Anywhere. It will allow Virgin TV customers to stream live channels to their iPhone or iPad, "with even more available on their PC, Mac or laptop, including thousands of hours of on demand content," the firm said.
The company recently re-launched its movie pay-per-view service as Virgin Movies. "The revitalized movie service offers over 500 of the latest films straight from the cinema, as well as a massive catalog of films available on-demand on TV or via the web with the online service available to everyone, including non-Virgin Media customers as well," the company said.