Telenet Group Holding NV (TNET), the Belgian cable operator controlled by Liberty Global Inc. (LBTYA:US), reported second-quarter earnings that beat analyst estimates after reducing promotions that curbed subscriber growth.
Earnings before interest, tax, depreciation, amortization and share-based remuneration rose 11 percent to 216.3 million euros ($286.3 million), the Mechelen, Belgium-based company said today in a statement. That surpassed the 210.8 million-euro average of six estimates compiled by Bloomberg. Revenue of 408 million euros missed analysts’ projections amid slowing subscriber gains and free video-on-demand vouchers handed out after a network outage in February.
Telenet added 49,900 mobile-phone customers in the quarter, the fewest in a year, as competitors cut their prices and the cable operator reduced handset subsidies to focus on more profitable acquisitions. Its fixed-line bundled products got a makeover in July, modeled after its King & Kong mobile rate plans, that should help drive revenue growth per subscriber and revive the switchover of the remaining analog viewers to digital TV services.
“The move directs Telenet more toward the high-end customer, with the cheapest triple-play bundle at 61.45 euros a month,” Thomas Deschepper, an analyst at KBC Securities, wrote in a note to clients. “A repricing of the high-end Kong offer could also be in the offing since it is somewhat outpriced by rivals.”
Telenet gained as much as 1.25 percent on Euronext Brussels and traded 15 cents higher at 36.64 euros by 5 p.m. local time. The earnings report was published ahead of the planned release time because of an embargo break that led the Belgian regulator to halt trading in the shares.
The cable operator maintained its forecasts for the year, which includes stable free cash flow. Telenet generated 100.5 million euros of cash available for payouts or buybacks in the six months through June, a 13 percent drop from the same period a year earlier.
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