Liberty .(US:LBTYK)2023-05-08 16:00Customer Base - As of March 31, 2023, the company served 4,153,500 fixed-line customers and 5,879,000 mobile subscribers, with networks passing 7,872,200 homes[216] Financial Performance - Consolidated Adjusted EBITDA for the three months ended March 31, 2023, was $624.5 million, a decrease from $684.3 million in the same period of 2022, reflecting a decline of approximately 8.6%[226] - The company reported a loss from continuing operations of $713.5 million for the three months ended March 31, 2023, compared to a profit of $1,075.7 million in the same period of 2022[226] - Total revenue for the three months ended March 31, 2023, was $1,868.4 million, an increase of $15.1 million or 0.8% compared to $1,853.3 million in 2022[229] - Adjusted EBITDA for the total reportable segments was $624.5 million, a decrease of $59.8 million or 8.7% from $684.3 million in 2022[239] - Consolidated revenue increased by $15.1 million or 0.8% for the three months ended March 31, 2023, compared to the same period in 2022[245] - Earnings from continuing operations for Q1 2023 were reported at a loss of $713.5 million, compared to earnings of $1,075.7 million in Q1 2022[282] Revenue Breakdown - Switzerland's revenue decreased by $14.0 million or 1.7% to $807.4 million, with an organic decrease of $15.2 million or 1.8%[229] - Belgium's revenue increased by $30.1 million or 4.2% to $754.5 million, with an organic increase of $16.4 million or 2.1%[229] - Ireland's revenue decreased by $4.8 million or 3.8% to $123.0 million, with an organic increase of $0.9 million or 0.7%[229] - Total residential revenue decreased by $38.6 million or 3.1%, with a total residential fixed revenue decline of $30.4 million or 4.0%[245] - Residential mobile subscription revenue increased by $9.0 million or 2.5%, primarily driven by growth in Belgium[246] - B2B subscription revenue rose by $5.1 million or 3.8%, also mainly due to an increase in Belgium[248] - Other revenue grew by $23.8 million or 8.6%, attributed to higher broadcasting revenue in Belgium, Switzerland, and Ireland[249] Costs and Expenses - Inflationary pressures have increased operating costs, including labor and programming, which may negatively impact operating results and cash flows[218] - Programming and other direct costs of services increased by $33.9 million or 6.3%, with an organic increase of $19.8 million or 3.5%[253] - Other operating expenses (excluding share-based compensation) rose by $26.5 million or 9.7%, with an organic increase of $22.4 million or 7.8%[256] - Core network and IT-related costs increased by $8.7 million or 14.2%, primarily due to higher expenses in Central and Other, Switzerland, and Ireland[257] - SG&A expenses (excluding share-based compensation) increased by $14.5 million or 4.0% to $373.8 million for the three months ended March 31, 2023, compared to $359.3 million in the same period of 2022[259] - External sales and marketing costs rose by $8.4 million or 10.8%, primarily due to higher advertising campaign costs in Switzerland[259] Joint Ventures - The company holds a 50% noncontrolling interest in the VMO2 joint venture and the VodafoneZiggo joint venture, consolidating 100% of their revenue and Adjusted EBITDA in its financial statements[222] - VMO2 JV reported revenue of $3,162.7 million, a decrease of $235.3 million or 6.9% compared to $3,398.0 million in 2022[229] - VodafoneZiggo JV reported revenue of $1,083.4 million, a decrease of $46.6 million or 4.1% compared to $1,130.0 million in 2022[229] - Adjusted EBITDA for VodafoneZiggo JV decreased to $471.5 million in Q1 2023 from $537.8 million in Q1 2022, a decline of about 12.3%[276] Foreign Currency and Economic Factors - The company experienced significant foreign currency transaction losses of $302.9 million for the three months ended March 31, 2023, compared to gains of $575.0 million in the same period of 2022[226] - The primary exposure to foreign exchange risk was to the euro and Swiss franc, with 58.6% and 43.2% of reported revenue derived from these currencies, respectively[221] - The impact of foreign exchange fluctuations resulted in a $28.1 million decrease in residential revenue[245] Debt and Liquidity - As of March 31, 2023, the consolidated debt and finance lease obligations totaled $15.2 billion, with $0.8 billion classified as current and $7.7 billion not due until 2029 or thereafter[308] - The company aims to maintain a consolidated debt balance between four and five times its consolidated Adjusted EBITDA[306] - The company believes it has sufficient resources to repay or refinance the current portion of its debt and finance lease obligations over the next 12 months[309] - The company does not foresee any instances of non-compliance with debt covenants that would materially impact liquidity in the next 12 months[307] Shareholder Actions - The company repurchased shares totaling $236.8 million during the three months ended March 31, 2023, under a program authorized to repurchase 10% of total outstanding shares[300] Other Financial Metrics - Cash and cash equivalents totaled $1,446.2 million as of March 31, 2023, with $1,106.7 million held by borrowing groups[290] - Adjusted free cash flow for the three months ended March 31, 2023, was $(178.4) million, compared to $104.4 million in the same period of 2022[319] - Net cash provided by operating activities decreased to $307.8 million for the three months ended March 31, 2023, down from $605.6 million in the same period of 2022, representing a decline of $297.8 million[311] - Net cash used by investing activities increased significantly to $(1,423.2) million in Q1 2023, compared to $(39.4) million in Q1 2022, a change of $(1,383.8) million[312]