NTL reports first-ever operating profit

5 May 2004

Cable company NTL has announced a first-quarter operating profit following years of losses, the company reported today. The profit figure excludes interest, currency rates and other factors but it marks an improvement on the situation for the same quarter a year ago.

Then, the cable company registered an operating loss of £54.1m sterling. For the first three months of 2004 however, NTL was in the black to the tune of £2.2m sterling. The company also reduced its net losses in the quarter, to £65.4m sterling from £174.7m sterling for the same period in 2003. The company attributed this to the addition of more than 60,000 new home subscribers as well as debt refinancing which lowered its cost.

Total revenues at the cable TV, telephony and internet provider rose by 7pc to £585m sterling.

The company’s Irish operation performed well, with profits up although turnover remained flat. Revenues were £17.5m sterling for the quarter but segment profit rose by 24.5pc to £6.1m sterling in Q1 2004 from £4.9m sterling in Q1 2003. NTL said the increase was mainly due to a reduction in its bad debt charge, a more rigorous credit policy along with reduced employee related costs and other operating cost efficiencies. However, the performance shows a falloff in performance on the last two quarters of 2003, which saw NTL register profits in Ireland of £7.4m sterling (Q4) and £7.5m sterling (Q3). Revenues were also higher than in Q1 during both those quarters.

The company has close to 341,200 residential customers (including MMDS) in Ireland. Customer numbers for its digital television service grew by approximately 7,100 to 78,400 (including MMDS).

Graham Sutherland, managing director of NTL Ireland, called the results “very encouraging” and he said they marked a “significant improvement” in financial performance of the Irish operation. “During 2004, we will continue to focus on improving our operational performance and strengthen our products and services,” he said in a statement.

By Gordon Smith