Telenet Group Holding NV (TNET), the Belgian cable operator controlled by Liberty Global Inc. (LBTYA:US), reported sales and earnings that beat analyst estimates after adding the most triple-play subscribers in more than two years.
First-quarter earnings before interest, tax, depreciation and amortization rose 11 percent to 192.6 million euros ($253.4 million), the Mechelen, Belgium-based company said today in a statement. That beat the 187.8 million-euro average of nine analyst estimates compiled by Bloomberg. Revenue climbed 10 percent to 364 million euros, surpassing analyst projections of 356.4 million euros.
Telenet keeps generating incremental revenue from existing customers as an additional 22,700 subscribers signed up for a combined offer of digital TV, broadband Internet and fixed telephony in the quarter. The cable operator maintained its forecast that revenue growth will slow in the second half as the effect of last year’s price increases and a boost from first- time subscribers of sport broadcasts fades.
While Chief Executive Officer Duco Sickinghe said the renewal of the mobile virtual-network operator agreement with Mobistar SA “strategically ensures Telenet’s future in mobile telephony,” he also called on the Belgian telecommunications regulator to assist the development of Telenet and its Walloon partner Tecteo Group as Belgium’s fourth mobile operator by forcing the existing companies to share network infrastructure and make use of the spectrum Telenet and Tecteo acquired last year.
The cable operator reiterated its forecast for stable cash generation less capital spending this year after free cash flow fell 36 percent to 55 million euros in the quarter. Telenet made a final 10.4 million-euro payment for the Belgian soccer broadcast rights for the current season and working capital increased by 21.6 million euros in the quarter, a cash drain that Telenet expects to reverse during the course of this year.
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