Liberty Global talked up the solid performance of its European operations in its first public statements since it began discussing the sale of some assets on the continent to Vodafone Group.
In a Q4 2017 earnings statement, the cable company reported an increase in subscribers and revenue in Germany and its Central and Eastern Europe (CEE) divisions – areas where its operation on mainland Europe most closely crosses over with Vodafone’s existing business.
Liberty’s Germany business gained 55,000 subscribers during the quarter, compared with 98,000 net adds in Q4 2016, taking its user base to 13 million at end-December. Revenue was up 12.1 per cent year-on-year to $717 million.
In CEE, net additions of 117,000 (down from 121,000 in Q4 2016) took its total user base to 9.4 million. Q4 revenue for the region increased 15.8 per cent year-on-year to $317 million.
Across its complete operation – which also includes the UK and a range of other European markets – the company made a Q4 loss of $992 million compared to a profit of $2.2 billion for the same period of 2016.
Liberty Global said the two figures were not directly comparable as Q4 2017 earnings included the impact of the removal of its Netherlands unit and now spun-off LatAm business. CEO Mike Fries (pictured) added the company’s 2017 “ended on a high note”.
In early February Vodafone confirmed it was in talks with Liberty Global over a potential acquisition of a number of “overlapping continental assets” in Europe.
Both Vodafone and Liberty Global currently operate in Germany, Romania, Hungary, Czech Republic, Republic of Ireland and the UK. Although the markets being discussed have not been disclosed, the mention of “continental Europe” in a Vodafone statement announcing the talks would appear to exclude Ireland and the UK.
The two companies currently operate a joint venture in the Netherlands under the brand VodafoneZiggo. A wider tie-up had been widely rumoured since the two broke off talks of an asset swap in 2015 after an apparent difference of opinion on the valuation of some of the assets on the table.
Despite ongoing talks with Vodafone, the deconsolidation of its Dutch operation and a proposed sale of its Austrian business to Deutsche Telekom announced in December 2017, Fries remains confident the company can still grow in Europe.
In an interview with Financial Times following the release of Q4 and full year 2017 earnings, Fries said he “wouldn’t be surprised” if the company’s European operation wasn’t larger in three years than currently. This, he added, could be achieved by rebalancing its assets to focus on scaling its business in a smaller number of markets.