Loss Widens at Virgin Media

LONDON, February 28: Virgin Media saw its fourth-quarter loss widen from £56.2 million to £122.1 million, while for the full year it posted a loss of £533.9 million compared with 2006’s profit of £421 million.

The losses were posted despite revenue gains for each period, with Q4 revenues more than doubling to £1.1 billion and full-year revenues up to £3.6 billion from £2 billion. The company attributed the losses to the £19.1 million in costs related with the Telewest merger, as well as £5 million in expenses from rebranding from NTL to Virgin Media.

Cable revenues were up to £813.2 million, with content revenues static at £116.7 million. Mobile revenues were £151.7 million.

"Our first set of figures released under our new name show continued improvement, with revenue growth across all segments, good growth in ARPU and triple play penetration, reduced churn and strong broadband and TV net additions,” said Steve Burch, the CEO of Virgin Media. “Underlying OCF growth was strong before the impact of merger implementation, rebrand and M&A costs. Overall, the performance of the underlying business is on track and provides a strong foundation for the rebranding to Virgin Media. Consumer reaction to the rebrand, announced on February 8, has been very encouraging. Our rebrand and the ongoing improvements to our business that it reflects, signal a great opportunity for our customers and investors and poses a serious challenge to our competitors."

For the cable segment in the fourth quarter, Virgin Media recorded 213,500 subscriber additions, down from 229,200 in the third quarter. Churn was 1.7 percent, down from the previous quarter’s 1.8 percent. Net customer losses were 37,000 in the quarter, essentially flat as compared to the previous quarter. Broadband subscriptions grew by 78,100 in the quarter, while net digital TV additions were 83,900, down from 85,800 in Q3. Total TV net additions, which include analog television, were 38,500 in the quarter, up from 22,200 in the previous quarter. Telephony did not fare as well, with subscriber losses of 64,300.

In the mobile segment, net customer additions in the quarter were 11,100, compared to 122,700 in the previous quarter.