John Malone’s Liberty Global is lowering its European growth target this year after the international cable operator posted a lower-than-expected start in the region with European operating income for the group down 18% year-on-year at $431M.
The company said in its 2017 Q1 financial and operating results for Liberty Global Group and LiLAC Group that it now anticipated its full-year growth for Liberty Global Group to be around 5%, down from 6% in February.
“In terms of our European financials, we had a soft start to the year on the revenue front with 2% rebased growth in Q1, mainly due to challenging mobile results in Belgium and the UK,” said Liberty Global CEO Mike Fries. “Of note, we delivered a solid B2B performance with 9% rebased revenue growth during the quarter, driven by robust SOHO and SME results. Consistent with our projection for full-year growth to be back-end loaded again this year, we generated 4% rebased OCF growth in Q1.”
In the first quarter, the group added 40,000 customers, fueled by strong quarterly additions in the UK and MDU contributions in Germany. Organic revenue generated units were up 40% year-on-year with 244,000 net additions.
“Although we delivered 102,000 new premises at Virgin Media in Q1 and a total of around 700,000 homes to date, we expect that the management transition and related review is likely to result in a slower build pace than what we previously expected for 2017,” said Fries. “We will provide an update after our second quarter. Our new build plans throughout the rest of continental Europe are progressing well.”
The company’s Latin American and Caribbean operation, LiLAC saw rebased revenues of $911M, down 0.8% year-on-year as well as a rebased operating cash flow of $354M, down 9.6%. The company also saw a record number of new customers for the first quarter with 33,000 while organic revenue generating units were up 96.7% with 41,900 additions.
Fries said it was a “challenging first quarter” for the LiLAC business, “which was an anomaly when compared to preceding and subsequent quarters.”
He added that business in Chile and Puerto Rico continued to perform strongly. “Going forward, we continue to anticipate approximately $1.5B of OCF for full-year 2017 and are preparing for the hard spin of LiLAC Group towards the end of the year.”