Telenet Group Holding NV (TNET), the Belgian cable operator controlled by Liberty Global Inc. (LBTYA:US), maintained its forecasts for the full year as revenue growth slowed and first-half cash generation fell amid a push to migrate remaining analog viewers to digital television.
Second-quarter sales rose 7.3 percent to 363 million euros ($447 million) after a 9.8 percent increase in the preceding three months, the company said today in a statement. Earnings before interest, tax, depreciation and amortization climbed 8.1 percent to 194.4 million euros in the latest quarter. Analysts had projected revenue and Ebitda of 363.9 million euros and 190.7 million euros, respectively.
Telenet migrated 14 percent of its remaining analog cable- TV customers to the digital platform in the first half. The campaign drove up expenses for set-top boxes and installation costs and also led 28,500 clients to cancel their basic cable-TV subscriptions, leaving less cash available for future payouts. A deceleration in revenue growth stemmed mostly from lower handset sales due to iPhone 4S inventory shortages and the increased take-up of triple play products, which give consumers discounts compared to stand-alone products.
Revenue growth will continue to 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, Telenet said, reiterating its forecast for a 5 percent to 6 percent increase in sales this year. The cable operator also maintained its forecast for stable cash generation less capital spending this year after free cash flow fell 15 percent to 117.4 million euros in the first half.
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