Telenet reported increase in revenue, operating profit, EBITDA and EBITDA margin, and dip in net profit and Capex during the first quarter of 2019.
Telenet revenue increased 1 percent to €626.4 million. Telenet operating profit rose 38 percent to €151.9 million. Telenet net profit fell 51 percent to €14.7 million. Telenet posted EBITDA of €320.3 million (+4 percent) with EBITDA margin of 51.1 percent.
Brussels-based Telenet said its Capex dropped 16 percent to €131.4 million. Capex to sales ratio of Telenet reached 21 percent in Q1 2019 vs 25.3 percent in Q1 2018.
Telenet generated revenue of €144.9 million (€145.7 million) from video, €161.2 million (€153.9 million) from broadband internet, €55.6 million (€59.3 million) from fixed-line telephony, €107.2 million (–3 percent) from mobile telephony and €52.5 million (+32 percent) from business services.
Telenet has reported a drop in video revenue due to the gradual decline in video subscriber base, impacted by the migration of former SFR Belux subscribers, and lower revenue from transactional VOD services.
Telenet achieved growth in broadband internet revenue due to demand from small business segment and price adjustment.
John Porter, Telenet’s Chief Executive Officer, said: “We improved operational performance as we stepped up commercial activities and migrated all remaining former SFR subscribers to our fully upgraded network in Brussels.”
Opex
Telenet said its network operating expenses reached €54.3 million for Q1 2019 compared to €53.5 million for Q1 2018.
It completed the transfer of network field services to Unit-T. Telenet has 30 percent stake in Unit-T.
The strategy to shift its network field services to Unit-T results in higher network operating expenses and higher costs related to outsourced labor and professional fees. Telenor will be able to reduce staff-related expenses as the company transferred field engineers to this new company.
Capex
Telenet has deployed around 432 new sites and upgraded 96 percent of HFC nodes. Telenet has the superior quality mobile network. Telenet has the highest available data download speeds compared to competition, according to Testaankoop.
Telenet, which completed the upgrade of fixed network, will be capable of offering 1 Gigabit download speeds in the near future.
Telenet aims to complete the Grote Netwerf project mid-2019. Capex for customer premises equipment — spending on set-top boxes, modems and WiFi powerlines, was €34.1 million (+36 percent) in Q1 2019.
Capex for network growth and upgrades reached €28.5 million (–53 percent). Capex for IT platforms and systems, was €25.7 million (–11 percent). Telenet said 68 percent of capital expenditures were scalable and subscriber growth related.