LBTYA
Liberty Global LTD
NASDAQ
8-K: Liberty Global Provides Preliminary Q2 Results for Sunrise and VM Ireland
Sentiment:
Quarterly Results
25 July 2024 4:29 PM
Liberty Global released preliminary unaudited financial and operating results for its Sunrise Holding Group and VM Ireland for the quarter ended June 30, 2024.
Worse than expected
VM Ireland's net earnings decreased by 32.3% year-over-year, indicating a significant downturn in profitability.
Sunrise Holding Group's net loss increased by 12.3% year-over-year, suggesting a worsening financial position.
Summary
- Liberty Global has released preliminary Q2 2024 results for Sunrise Holding Group and VM Ireland.
- VM Ireland saw a 1.9% year-over-year decrease in revenue to 111.5 million, with a 32.3% decrease in net earnings to 10.9 million.
- VM Ireland's Adjusted EBITDA decreased by 2.1% year-over-year to 42.5 million.
- VM Ireland's B2B revenue increased by 15.4% year-over-year to 10.5 million, driven by entry into wholesale access.
- VM Ireland added 254,000 premises through an off-net program with National Broadband Ireland (NBI).
- VM Ireland upgraded nearly 40% of its premises to full fiber by the end of Q2.
- Sunrise Holding Group's revenue increased by 1.1% year-over-year to 769.5 million, while net loss increased by 12.3% to 75.0 million.
- Sunrise Holding Group's Adjusted EBITDA increased by 1.3% year-over-year to 271.8 million.
- Sunrise Holding Group achieved 5,000 net broadband customer additions and 32,900 mobile postpaid net additions in Q2.
- Sunrise Holding Group's fixed-mobile convergence penetration reached 59%, an increase of 0.9% year-over-year.
- Sunrise Holding Group is on track for a spin-off in Q4, with a Capital Markets Day scheduled for September 9 in Zurich.
- Sunrise Holding Group's 2024 financial guidance includes broadly stable revenue and stable to low-single-digit growth in Adjusted EBITDA.
Sentiment
Score: 5
Explanation: The sentiment is neutral to slightly negative due to mixed results. While there are positive aspects like B2B growth and fiber upgrades, the significant decreases in net earnings and increased net losses raise concerns. The forward guidance is stable, but not overly optimistic.
Positives
- VM Ireland's B2B revenue saw a significant increase of 15.4% year-over-year.
- VM Ireland expanded its market reach by adding 254,000 premises through the NBI partnership.
- VM Ireland made substantial progress in its fiber upgrade program, reaching nearly 40% of premises.
- Sunrise Holding Group achieved positive broadband net adds for the second consecutive quarter.
- Sunrise Holding Group experienced an acceleration in mobile postpaid growth, with 32,900 net additions.
- Sunrise Holding Group's fixed-mobile convergence penetration continues to grow, reaching 59%.
Negatives
- VM Ireland's overall revenue decreased by 1.9% year-over-year.
- VM Ireland's net earnings decreased significantly by 32.3% year-over-year.
- VM Ireland's Adjusted EBITDA decreased by 2.1% year-over-year.
- VM Ireland experienced fixed customer net losses of 4,100 in Q2.
- Sunrise Holding Group's net loss increased by 12.3% year-over-year.
- Sunrise Holding Group's Adjusted EBITDA less P&E Additions decreased by 8.8% year-over-year.
Risks
- VM Ireland's financial performance is being impacted by growth investments.
- VM Ireland's fixed customer net losses were impacted by elevated churn and a fixed price rise.
- Sunrise Holding Group's net loss increased due to lower realized and unrealized losses on derivative instruments, a decrease in foreign currency gains, and an increase in income tax expense.
- Sunrise Holding Group's customer ARPU decreased by 0.8% year-over-year due to the competitive environment.
- The price increase effect for Sunrise will no longer be visible in the second half of the year.
Future Outlook
Liberty Global anticipates the full 100.0 million of borrowing capacity will continue to be available for VM Ireland. Sunrise Holding Group expects broadly stable revenue and stable to low-single-digit growth in Adjusted EBITDA for 2024. Sunrise is on track for a spin-off in Q4.
Management Comments
- Tony Hanway, CEO of VM Ireland, stated they made significant progress on strategic priorities during the second quarter.
- Tony Hanway highlighted the partnership with National Broadband Ireland (NBI) and the fiber upgrade program.
- Tony Hanway noted that overall financial performance continues to be impacted by growth investments.
- Andr Krause, CEO of Sunrise, commented that they strengthened commercial momentum and reduced the churn rate significantly.
- Andr Krause stated that they achieved net customer growth in broadband for the second quarter in a row.
- Andr Krause confirmed that they remain on track with their financial results and fully confirm their 2024 guidance.
- Andr Krause mentioned that preparations for the spin-off are progressing according to plan.
Industry Context
The results reflect the ongoing trends in the telecommunications industry, including the push for fiber upgrades, the importance of B2B revenue streams, and the competitive pressures on customer acquisition and retention. The partnership between VM Ireland and NBI is an example of strategic collaborations to expand network reach. The planned spin-off of Sunrise is a strategic move to unlock value and focus on core operations.
Comparison to Industry Standards
- VM Ireland's revenue decline of 1.9% is not uncommon in the competitive telecom market, but the 32.3% drop in net earnings is a concern and may be worse than some peers.
- VM Ireland's B2B growth of 15.4% is a positive sign, indicating a successful diversification strategy, which is in line with industry trends.
- The fiber upgrade program at VM Ireland, with nearly 40% of premises upgraded, is a significant achievement, comparable to other European operators investing in next-generation networks.
- Sunrise Holding Group's 1.1% revenue growth is modest, but the 1.3% increase in Adjusted EBITDA is a positive indicator of operational efficiency, although the net loss increase is a concern.
- Sunrise Holding Group's broadband net adds of 5,000 and mobile postpaid net adds of 32,900 are solid results, showing a positive trend in customer acquisition, which is better than some competitors in the Swiss market.
- The fixed-mobile convergence penetration of 59% at Sunrise is a strong indicator of successful bundling strategies, which is a key focus for many telecom operators globally.
- The planned spin-off of Sunrise is a strategic move similar to other telecom companies that have divested non-core assets to focus on core operations and unlock shareholder value.
Stakeholder Impact
- Shareholders may be concerned about the decrease in net earnings and increased net losses.
- Customers of VM Ireland will benefit from the expanded network reach and fiber upgrades.
- Customers of Sunrise Holding Group will benefit from increased broadband speeds and improved mobile services.
- Employees of both groups may be affected by the ongoing strategic changes and cost optimization efforts.
Next Steps
- VM Ireland will continue to focus on its fiber upgrade program and the NBI partnership.
- Sunrise Holding Group will proceed with preparations for its spin-off in Q4.
- Sunrise Holding Group will hold a Capital Markets Day on September 9 in Zurich.
- Both groups will continue to focus on customer acquisition and retention.
Key Dates
- July 25, 2024: Date of the press release and 8-K filing, providing preliminary Q2 2024 results.
- June 30, 2024: End of the reporting period for the preliminary Q2 2024 results.
- August 2024: Expected date for the release of the full unaudited financial statements for the fixed-income borrowing groups.
- September 9, 2024: Date of the Capital Markets Day for Sunrise Holding Group in Zurich.
Keywords
Liberty Global, Sunrise Holding Group, VM Ireland, broadband, fiber, mobile, EBITDA, revenue, net earnings, customer growth, fixed-mobile convergence, B2B, wholesale access
LBTYA
Liberty Global LTD
NASDAQ
Sector: Communication Services
Filings with Classifications
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Quarterly Report
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Capital raise
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Worse than expected
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Preliminary Results
- Overall revenue decreased YoY for both FY 2024 and Q4 2024, indicating underperformance compared to the previous year.
- Residential fixed and mobile revenue decreased YoY in Q4 2024, suggesting challenges in the core business segments.
- Fixed-line customer relationships decreased by 9,500 YoY, reflecting customer losses.
Capital raise
18 February 2025 4:16 PM
Quarterly and Full Year Results
- Liberty Global will focus on the inherent value of its fixed networks and, specifically, seek to raise capital for its fiber NetCos in Belgium and the U.K.
Better than expected
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Annual Report
- The company reported earnings from continuing operations of $1,869.1 million for 2024, a significant improvement compared to the loss of $3,659.1 million in 2023.
Worse than expected
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Worse than expected
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Quarterly Report
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Worse than expected
29 October 2024 4:27 PM
Quarterly Results
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Worse than expected
29 October 2024 4:11 PM
Quarterly Report
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Worse than expected
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Quarterly Report
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Worse than expected
9 September 2024 9:03 AM
Spin-off Announcement
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Worse than expected
25 July 2024 4:32 PM
Quarterly Report
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Worse than expected
25 July 2024 4:29 PM
Quarterly Results
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- Sunrise Holding Group's net loss increased by 12.3% year-over-year, suggesting a worsening financial position.
Worse than expected
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Quarterly Report
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Better than expected
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Quarterly Report
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Better than expected
2 May 2024 4:49 PM
Earnings Call Transcript
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- Analysts have estimated a preliminary value for Sunrise of approximately $11 per Liberty share, which is significant in relation to the current stock price.
Better than expected
2 May 2024 4:48 PM
Earnings Call Update
- The spin-off is expected to unlock significant value for shareholders by establishing a separate, higher valuation for Sunrise.
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Worse than expected
1 May 2024 4:26 PM
Quarterly Results
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Worse than expected
1 May 2024 4:15 PM
Quarterly Report
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Better than expected
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Quarterly Report
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Better than expected
16 February 2024 4:43 PM
Strategic Announcement
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- The company is investing $1.7 billion to deleverage Sunrise, increasing its equity value.
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Worse than expected
15 February 2024 4:32 PM
Quarterly Results
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Delay expected
15 February 2024 4:32 PM
Quarterly Results
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Worse than expected
15 February 2024 4:16 PM
Quarterly Report
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- The company also reported a significant loss from continuing operations, further highlighting the worse than expected results.
Delay expected
15 February 2024 4:16 PM
Quarterly Report
- Sunrise experienced a delay in activations, which impacted their broadband performance in Q4.
- Telenet's results were impacted by continued IT platform migration issues throughout 2023.
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