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Liberty Global (LBTYA) Incurs Loss in Q2, Revenues Fall Y/Y

Zacks Equity Research
·5 mins read

Liberty Global's LBTYA second-quarter 2020 net loss was $524.2 million against the year-ago quarter's earnings of $53 million.

Revenues declined 4.5% year over year to $2.72 billion. On a rebased basis, revenues dipped 4.3% from the year-ago quarter.

Liberty Global gained 7,700 customer relationships in the reported quarter against a loss of 28,600 in the year-ago quarter.

Fixed-mobile convergence (“FMC”) continued to drive mobile growth with more than 100,000 post-paid additions. Markedly, FMC penetrations reached 23%, 46% and 22% at VirginMedia, Telenet and UPC Switzerland, respectively.

Top-Line Details

Average revenue per unit (“ARPU”) per cable customer relationships decreased 3.6% to $57.35. On a rebased basis, the figure declined 1.3%.
 

Liberty Global PLC Price, Consensus and EPS Surprise

Liberty Global PLC Price, Consensus and EPS Surprise
Liberty Global PLC Price, Consensus and EPS Surprise

Liberty Global PLC price-consensus-eps-surprise-chart | Liberty Global PLC Quote

 

Mobile ARPU, (including interconnect revenues) on a reported basis, declined 5.1% to $15.65. On a rebased basis, the figure decreased 8.4%.

Further, mobile ARPU (excluding interconnect revenues) on a reported basis, slid 7% to $13.16. On a rebased basis, the figure was down 4.8%.

In United Kingdom/Ireland, Virgin Media gained 23,900 customer relationships against a loss of 5,600 in the year-ago quarter.

The U.K./Ireland revenues, on a reported basis, slipped 6.8% year over year to $1.53 billion. On a rebased basis, U.K./Ireland revenues were down 3.6% year over year.

In Belgium, Telenet lost 2,900 customer relationships compared with loss of 8,000 in the year-ago quarter.

Belgium revenues, on a reported basis, decreased 4.3% year over year to $682.5 million. On a rebased basis, revenues fell 5.2%.

In Switzerland, Liberty Global lost 16,400 customer relationships compared with loss of 18,100 in the year-ago quarter.

Switzerland revenues, on a reported basis, decreased 5% year over year to $299.1 million. On a rebased basis, revenues decreased 8.6%.

Continuing CEE (Poland and Slovakia) gained 3,100 customer relationships compared with 3,300K in the year-ago quarter.

Continuing CEE revenues, on a reported basis, declined 2.4% to $93.7 million. On a rebased basis, the top line increased 4.2%.

Revenues from the Dutch joint venture decreased 4.2% year over year on a rebased basis.

Liberty Global built 126,000 new premises in the reported quarter including 93,000 in the U.K. & Ireland.

Operating Details

Adjusted EBITDA declined 0.2% year over year to $1.19 billion in the second quarter.

U.K./Ireland EBITDA, on a rebased basis, decreased 1.5% year over year. Switzerland EBITDA also, on a rebased basis, was down 9.9% from the year-ago quarter.

However, Belgium EBITDA, on a rebased basis, increased 3.7% year over year. Continuing CEE EBITDA also, on a rebased basis, increased 4.2% year over year.

Loss from continuing operations was $503.8 million in the reported quarter compared with loss of $339.6 million in the year-ago quarter.

Segmental operating cash flow (operating income after adjusted for non-cash items) increased 14.2% year over year to $600.5 million, on a rebased basis.

Balance Sheet & Cash Flow

As of Jun 30, 2020, Liberty Global had $9.8 billion of cash, investments under SMAs and unused borrowing capacity.

Total principal amount of debt and finance leases were $27.7 billion for continuing operations. Moreover, the average debt tenor is seven years, with approximately 77% not due until 2026 or thereafter.

As of Jun 30, 2020, Liberty Global’s adjusted gross and net leverage ratios were 5.3X and 3.X, respectively.

Cash provided by operating activities was $1.14 billion, down 13.6% year over year.

Moreover, adjusted free cash outflow was $455.7 million in the second quarter compared with $591.8 million in the year-ago quarter and $317 million in the previous quarter.

The company bought back roughly $750 million shares under its repurchase program in the reported quarter.

Key Q2 Development

On May 7, 2020, Liberty Global entered into an agreement with Telefonica SA to form a 50:50 joint venture that will combine Virgin Media’s operations in the United Kingdom with Telefonica’s mobile business (O2).

Zacks Rank & Stocks to Consider

Libert Global currently carries a Zacks Rank #3 (Hold).

Vista Outdoor VSTO, LiveXLive Media LIVX and TEGNA TGNA are some better-ranked stocks in the broader consumer & discretionary sector. All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

While both Vista Outdoor and LiveXLive Media are set to report quarterly results on Aug 6, TEGNA is scheduled to report on Aug 10.

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Liberty Global PLC (LBTYA) : Free Stock Analysis Report
 
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