NTL, the debt-laden UK cable operator, had a mixed message for investors when it issued its third quarter figures yesterday.
Earnings before interest, tax, depreciation and amortisation (EBITDA) totalled £182 million in the three months to September 30, up 44% on the same period last year. However revenues fell to £617 million from £627 million in the last quarter (see
NTL Revenues Fall Slightly As Recapitalisation Approaches).
NTL said that it is on target to emerge from Chapter 11 bankruptcy by the end of this month after restructuring its finances in an attempt to tackle debts of $17 billion (see NTL Is Cleared For Reorganisation). The operator has been forced to cut back on connecting customers with the result that the number of phone, internet and TV subscribers declined to 2.67 million at the end of September from 2.7 million three months earlier.
“New NTL is conserving cash by minimising capital expenditure including expenditure to connect new customers to its network,” said the company in its statement
However, overall annualised churn was down to 16.4% and there is evidence that the heavy promotion of high-speed internet services is bearing fruit as the number of broadband subscribers increased from 275,600 to 380,600 in the third quarter.
Barclay Knapp, chief executive of NTL, confirmed that the company was in the process of finalising a $10.9 billion debt-for-equity swap. Having reduced its workforce by 8,000 in the last two years, NTL is preparing to cut another 250 jobs in the near future. Nonetheless, Knapp said that the company is committed to positive customer growth once the current restructuring deal is complete.
