Ziggo Net Soars on Lower Debt, Higher Sales

07/20/2012| 04:47am US/Eastern

Recommend:

0

-- Dutch cable-network company post net profit of EUR64.4 million

-- Sales and Ebitda grew at company, which floated shares in March

-- Management backs guidance

(Adds detail and comment throughout.)

By Archibald Preuschat

AMSTERDAM--Dutch cable-network company Ziggo NV (>> ZIGGO) said Friday that second-quarter net profit soared on lower debt and higher sales.

The company, which floated its shares in March, posted net profit of EUR64.4 million ($79.2 million), up from EUR7.4 million a year earlier, as its interest payments more than halved to EUR51.7 million, although comparison is tough due to the IPO.

Ziggo, which competes with Royal KPN NV (>> KPN KON) in the Dutch broadband market raised sales by 6.3% on year to EUR386.5 million, while adjusted earnings before interest, taxes, amortization and depreciation, or Ebitda, the company's preferred figure to reflect operational performance, was up 5.9% on the year to EUR219.2 million.

Ziggo posted a 4% increase in services sold, mainly driven by triple play services--TV, broadband Internet and fixed-line telephony--for private consumers and for small and midsize enterprises.

Competitor KPN will present second-quarter results Tuesday, and analysts expect that the incumbent has lost market share against cable network companies in the June quarter.

The second-largest cable-network provider in the Netherlands is Liberty Global Inc.'s (>> Liberty Global Inc.) UPC, but the companies have no geographic overlap.

Ziggo also further reduced its net debt to 3.54 times adjusted Ebitda from 3.67 times in the previous quarter. Ziggo's net debt stood at EUR3.03 billion at the end of the second quarter.

The Utrecht, the Netherlands-based company reiterated that it wants to raise revenue and adjusted Ebitda in 2012, but in a conference call the management declined to quantify the growth nor to elaborate on next year's prospects.

Ziggo's results came in line with expectations, but given the good share-price performance since the IPO, they may not be good enough to push shares higher, said UBS analyst Polo Tang, who has a buy rating with a EUR25.50 target.

At 0817 GMT, shares were down 2% at EUR25.91.

-Write to Archibald Preuschat; archibald.preuschat@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

0