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Virgin Media says fourth-quarter loss widened

Virgin Media says fourth-quarter loss widened

British television and telephony company Virgin Media Inc. said Thursday its fourth-quarter loss widened on higher costs and as sales dropped.
The U.K.'s second-largest pay-TV provider added 24,000 net cable customers in the fourth quarter, swinging from a loss of 37,000 subscribers the previous year. Overall, television subscriber net additions increased by 61,100 during the period, compared with a loss of 38,500 during the fourth quarter last year.
The company, which is trying to offset growing competition in the TV market by offering further broadband and mobile phone services, also saw broadband subscriber net additions grow by 15.6 percent to 111,200 from 96,100.
However, the company posted a net loss of 163.2 million pounds (US$324.4 million; euro215.8 million), compared with 88.1 million pounds a year earlier. Revenue fell by 2.9 percent to 1.05 billion pounds.
Virgin Media's Acting Chief Executive Officer Neil Berkett said the loss was due to higher interest and amortization costs paid by Virgin. Virgin Media said it had paid cash interest in the quarter of GBP106.1 million (US$212.9 million; euro141.6 million).
Sales growth slowed due to pricing pressure, he said, with rival high speed Internet providers cutting prices in the U.K.'s competitive marketplace.
JP Morgan analyst Jerry Dellis said that fourth quarter earnings were weaker than expected.
"There are some encouraging signs on cable churn, ARPU and margin but sustainability is unclear," said Dellis, who maintains a neutral rating on the stock.
"Having emphasized broadband as the 'hero' product in Nov., the fourth quarter instead saw Virgin Media delivering strong TV and telephony adds but a sequential decline in broadband adds," he said, adding that weak mobile and content margins also brought group operating income in below expectations.
Nevertheless, Berkett said he was happy with Virgin's operational performance, with sales picking up in the second half of 2007.


Updated : 2021-04-12 12:12 GMT+08:00