Virgin Media CEO says Brit broadband biz 'performed well' in Q2, which is a weird way to say losses almost tripled

More customers, more coverage, but profit proves elusive

It was up, up and up some more for Virgin Media in its latest full quarterly numbers: UK internet customers increased, network coverage swelled and losses almost tripled.

It's been a busy time for the broadband and TV provider, what with managing the pressures on its network caused by work-from-home traffic, the pending merger with O2 that's been given the regulatory green light, and the closure of all its remaining 53 retail shops in the UK.

For calendar Q2 ended 30 June [PDF], Virgin pulled in a little over 39,000 internet punters across Britain to hit 5,318,400 and network coverage went up by 93,000 premises.

Revenue came in at £1.234bn, down 3.5 per cent year-on-year "with certain low-margin revenue streams being temporarily impacted by COVID-19," Virgin said in its accounts summary.

Residential cable dropped 2.4 per cent to £890.8m: a rise in fixed-line customers was offset by a reduction in average revenue per user (ARPU), which Virgin said was due to a £22m top-line caused by "pause credits and the cancellation of premium sports subscriptions" as events were suspended.

Residential mobile was down 8.8 per cent across subscription and non-subscription revenue to £145.6m. B2B sales fell 1 per cent to £188.1m as the relatively smaller subscription base grew 10 per cent to £24.1m and the non-subscription side dropped 2.4 per cent to £164m.

Other business, including ad revenue, declined 41.6 per cent to £9.7m.

Virgin Media, owned by Liberty Global, reported a net loss of £203.9m versus a net loss of £53m in the same period of 2019.

This was "largely driven by the net effect of a change in realized and unrealized gains (losses) on derivative instruments... an increase in losses on debt modification and extinguishment... lower depreciation and amortization... a decrease in foreign currency transaction losses... higher related-party fees and allocations."

Virgin said its "robust network" was able to withstand a 50 per cent rise in data consumption during the quarter. Its own previous research pointed to households downloading an extra 325GB from the start of March until mid-June.

"This will certainly be a quarter that none of us will forget and Virgin Media has performed well," said CEO Lutz Schüler.

"Despite the challenges of Covid, we kept pushing forward to adapt as a business and give our customers more; this included creating more than 1,000 UK customer service roles. These efforts, and the essential role of our services, are really clear in these results. We've seen the best Q2 cable additions since 2016 and record mobile contract subscriber growth for the quarter." ®

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