Ono net profit falls by 14%
Iñaki Ferreras | 07-11-2012
Cable operator ONO has reported a net profit of €39 million in the period from January to September in 2012, a decrease of 14.3% from the same period in 2011.
Financial expenses arising from the refinancing of its debt, depreciation and updating its TV networks and telecoms systems are the main reasons the company cites for the drop.
The company ended the period with an increased EBITDA of 1.4%, reaching €565 million at the end of September 2012 and its EBITDA margin stood at 48.5%.
According to the company's statement, ONO’s revenue continued to grow in a difficult market environment, and amounted to €1,164 million in the first nine months of 2012, 5.4% more than the same period last year. The operating cash flow also continued its positive trend in the period with an increase of 3.5%, reaching €359 million at 30 September 2012.
With regard to its residential business, ARPU-average revenue per customer remained at €51.2, but suffered a slight decline of 1.9 % in total revenues in this segment, reaching a total of €858 million in the first nine months of the year. ONO says hiring will continue enhancing service packages (providing Internet, telephone, pay-TV and mobile phone) based on its fibre optic network.
The company’s business segment continued to grow with incomes during January to September 2012 34% higher than the same period last year, reaching a total of €303 million. The company has focused its strategy in this segment in solutions for small and medium enterprises, so that the SME business remained strong in the period with revenues that exceeded €64 million in the first nine months of 2012, up 13% from 2011.
The company’s investments from January to September 2012 amounted to €205 million and have been used primarily to further expand its fibre optic network and its smart TV service TiVo, and accelerate its project to update its voice network. The third quarter of the year saw the launch of the pilot project ONO Wi-Fi which aims to allow users to surf at high speeds through an urban Wi-Fi network.
The company’s residential services segment experienced a decline of 2.4%, closing the period with 4.16 million contract services. ONO blames the fall on the rise in VAT (from 8% to 21%) in the pay-TV service and the summer period which is a slow time for subscriber take-up. Meanwhile, the SME business increased by 21.5% to 198,000 commissioned services by 30 September 2012.
ONO continues to increase, quarter to quarter, the number of customers opting for its high-speed Internet browsing at 30Mb or more. At 30 September 2012, ONO had 678,000 subs for this, which is 48% of its total customer base for Internet.
In September subs for TiVo, the smart TV service which is exclusive to ONO in Spain, surpassed 56,000. Although this service currently has the capacity to reach 6.5 million households it has not yet taken off in Spain. The company says it is getting very positive customer satisfaction results in surveys but is still not attracting subscribers. The monthly price still seems high for Spanish users who, immersed in the economic crisis, tend to opt for audiovisual piracy.