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UPC drops deeper into the red

Pan-Euro cabler's sales improve

AMSTERDAM — United Pan-Europe Communications has posted a loss of 2.1 billion euros ($1.84 billion) for the first nine months of the year, up from $1.3 billion for the first nine months of 2000.

Sales for the Amsterdam-based cabler, however, jumped from $610 million to $878 million, with third quarter sales up 33% year on year.

Analysts described the results as a mixed bag, with operating performance slightly improved but with UPC backpedaling on the so-called hard roll-out of its digital services.

At its sixth months press conference, the company played up what it said was a massive marketing campaign for a digital roll-out across five territories in Europe. But if that campaign still exists, it is very discreet.

“From my point of view, the hard launch was less aggressive than the soft launch last year,” Wynand Heineken, a senior analyst with Dutch investment bank Labouchere, said.

UPC launched digital services in the Amsterdam area in October 2000 and by half year 2001 had netted a mere 42,000 subscribers. That figure now stands at 50,000.

UPC’s multi-billion dollar loan is tied to the company hitting its targets and one of those was that it would rack up 250,000 subs by year end. Company CFO Charles Bracken admitted the 250,000 figure was no longer an immediate target.

John Riordan, prexy and newly-appointed CEO of UPC, announced a restructure of UPC’s balance sheet and capital structure, but declined to expand on UPC’s relationship with Liberty Media. Liberty holds a substantial amount of UPC’s debt and is expected to become one of the major shareholders in its parent company UnitedGlobal.com in the near future.

Bracken defended UPC’s shaky status on the Amsterdam stock exchange (AEX). The company reported negative equity of $650 million, automatically putting it in penalty status until the situation is turned around.

“This is not a delisting,” Bracken said, adding that the company had been in talks with the AEX during the summer and was working to resolve the problem. If not, UPC will automatically be dropped from the index of most important companies in three months time. UPC is also listed on Nasdaq.

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