Liberty Global's (LBTYA) Q4 Loss Widens, Revenues Rise Y/Y
Liberty Global's LBTYA loss from continuing operations in fourth-quarter 2023 amounted to $3.471 billion, up 25.9% year over year.
Revenues increased 4.3% year over year to $1.920 billion. On a rebased basis, revenues declined 1.8% year over year.
The Zacks Consensus Estimate for the bottom line was pegged at a loss of 35 cents per share, while that for the top line was $1.88 billion.
Liberty Global Ltd Price, Consensus and EPS Surprise
Liberty Global Ltd price-consensus-eps-surprise-chart | Liberty Global Ltd Quote
Top-Line Details
Total average revenue per unit (ARPU) per fixed customer relationship increased 7.5% year over year to $66.63. On a rebased basis, the figure increased 1.5%. The figure beat the Zacks Consensus Estimate of $62.
Mobile ARPU (including interconnect revenues), on a reported basis, rose 6.4% to $26.86. On a rebased basis, the figure dropped 1%. Mobile ARPU (excluding interconnect revenues), on a reported basis, increased 8.9% to $25.08.
As of Dec 31, 2023, the total mobile subscriber count included approximately 2.8 million subscribers in Switzerland, 2.9 million in Belgium, 35 million from the VMO2 JV and 5.6 million from the VodafoneZiggo JV.
In total, Liberty Global lost 29,600 customer relationships in the fourth quarter compared with a loss of 6,700 in the year-ago quarter.
Belgium’s revenues, on a reported basis, decreased 10.6% year over year to $652 million. The figure missed the Zacks Consensus Estimate of $786 million.
In Belgium, Liberty Global lost 12,600 customer relationships compared with a loss of 5,900 in the year-ago quarter.
Switzerland’s revenues, on a reported basis, improved 11.7% year over year to $897.5 million. The figure beat the Zacks Consensus Estimate of $845 million.
In Switzerland, LBTYA lost 12,200 customer relationships against a gain of 2,800 in the year-ago quarter.
Ireland’s revenues, on a reported basis, increased 3.9% to $134 million. The figure beat the Zacks Consensus Estimate of $132 million.
The company lost 3,900 customer relationships in Ireland compared with a loss of 2,900 in the year-ago quarter.
Central and other revenues, on a reported basis, surged 64.2% to $300.5 million. The figure beat the Zacks Consensus Estimate of $170 million.
In Slovakia, Liberty Global lost 900 customer relationships compared with a loss of 700 in the year-ago quarter.
Joint Venture Details
Sunrise revenues of $897.5 million in the fourth quarter of 2023 increased 11.7% year over year on a reported basis and 2.5% on a rebased basis. The rebased increase was largely driven by growth in mobile subscription revenues, a favorable phasing impact in mobile non-subscription revenues, continued trading momentum in flanker brands and business-to-business (B2B) and the positive impact of the July price increase.
Telenet revenues of $792.5 million in the fourth quarter of 2023 increased 8.8% year over year on a reported basis and 1.8% on a rebased basis. The rebased increase was primarily driven by a rise in B2B revenues and higher mobile subscription revenues due to the June price increase and growth in postpaid net adds.
Liberty Global’s non-consolidated joint venture, Virgin Media O2, reported revenues of $3.516 billion in fourth-quarter 2023 increased 9.4% year over year on a reported basis and decreased 2% on a rebased basis. The rebased decrease was primarily due to the decline in mobile revenues because of lower handset revenues and an increase in B2B revenues.
The fixed customer base grew by 2,600 in the fourth quarter, driven by 9,500 broadband net adds. Postpaid mobile also continued to grow, delivering 19,000 net adds. The average download speed across the company's broadband base increased 19% year over year to 358 Mbps, approximately 5x higher than the national average.
Vodafone Ziggo revenues increased 10.1% on a reported basis and 4.5% on a rebased basis to $1.153 billion in the fourth quarter. The rebased increase was primarily due to growth in mobile, driven by a rise in the customer base, B2B fixed and the October price increase.
VodafoneZiggo continues to drive momentum in mobile and convergence, as FMC households grew 7,000 and FMC net adds increased 9,700 in the fourth quarter to almost 2.7 million, delivering significant Net Promoter Scores along with customer loyalty benefits. FMC penetration increased from 46% to 48% year over year.
Mobile postpaid net adds grew 40,300, along with a rise in mobile postpaid ARPU of 3.3% year over year, primarily driven by the price indexation implemented in October 2023. The broadband base contracted by 26,500 net adds in the quarter, as a decline of 31,200 in Consumer was partially offset by an increase of 4,700 in B2B. Consumer fixed ARPU increased 3.7% year over year as a result of the price increase implemented in July.
Operating Details
Adjusted EBITDA declined 8.6% year over year to $546 million in the third quarter. On a rebased basis, EBITDA decreased 12%.
Switzerland’s EBITDA, on a rebased basis, increased 5.6% from the year-ago quarter.
Belgium’s EBITDA, on a rebased basis, decreased 3% year over year.
Ireland’s EBITDA, on a rebased basis, increased 6.1% year over year.
The company reported an operating loss of $205.3 million in the reported quarter compared with an operating loss of $45.4 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2023, Liberty Global had $5.3 billion of cash, investments under SMAs and unused borrowing capacity, including $1.4 billion in corporate cash and no material debt maturities until 2029. This compares favorably with $5 billion of cash, investments under SMAs and unused borrowing capacity in the previous quarter.
In the fourth quarter, the total principal amount of debt and finance leases was $15.9 billion for continuing operations compared with $15.3 billion in the previous quarter. The average debt tenor is 4.9 years, with approximately 47% not due until 2029 or later.
Cash provided by operating activities was $839.2 million, down 5% year over year.
Moreover, adjusted free cash flow was $527.6 million in the fourth quarter against a negative adjusted free cash flow of $102.3 million in the previous quarter and $439.1 million in the year-ago quarter.
Zacks Rank & Stocks to Consider
Liberty Global currently has a Zacks Rank #3 (Hold).
Playtika PLTK, Light & Wonder LNW and American Public Education APEI are some better-ranked stocks that investors can consider in the broader sector. PLTK, LNW and APEI sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Playtika have lost 11% in the year-to-date period. The company is set to report fourth-quarter 2023 results on Feb 26.
Shares of Light & Wonder have gained 8.5% year to date. The company is slated to report fourth-quarter 2023 results on Feb 27.
Shares of American Public Education have jumped 15.6% year to date. The company is scheduled to report fourth-quarter 2023 results on Mar 5.
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