Bloomberg News

Telenet Sees Stable Cash Generation, Will Pay First Dividend

February 17, 2012

Feb. 16 (Bloomberg) -- Telenet Group Holding NV, the Belgian cable operator controlled by Liberty Global Inc., forecast cash generation will trail growth in earnings this year because of network upgrades, payments for soccer rights and higher interest expenses.

Free cash flow will be little changed from 246.3 million euros ($321.5 million) last year, the Mechelen, Belgium-based company said today in a statement. Telenet forecast 2012 sales and earnings before interest, tax, depreciation and amortization will both rise 5 percent to 6 percent.

Telenet generated 4.5 percent less cash available for shareholder distributions last year. It increased spending to acquire Belgian soccer broadcast rights, switch over customers to its Fibernet broadband product and faced higher interest expenses because of additional debt and an extension of maturities. The cable operator said it will raise its payout to about 533 million euros, with a first dividend of 1 euro a share, an additional 3.25 euros-a-share capital reduction and a 50 million-euro stock buyback.

“We spoke to our investors and all of them, including our controlling shareholder, said they prefer a distribution that’s spread over time,” Chief Financial Officer Renaat Berckmoes told reporters in Mechelen today. Telenet said the dividend will be payable in May and plans a capital reduction in September, subject to shareholders’ approval.

Fourth-quarter earnings before interest, tax, depreciation and amortization jumped 12 percent to 182.6 million euros, surpassing the 178.5 million-euro average of eight analyst estimates compiled by Bloomberg. Revenue growth accelerated to 8.9 percent from 5 percent in the preceding three-month period, led by price increases, additional subscriptions for sports broadcasts and sales of iPhone 4S handsets.

--Editors: Jones Hayden, Peter Chapman

To contact the reporter on this story: John Martens in Brussels at jmartens1@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net


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