CEO credits cost control, efficiency
AMSTERDAM — Liberty Media’s troubled cable company United Pan-Europe Communications (UPC) exceeded growth expectations in 2002, posting a 15% jump in revenue for and halving massive net losses from a year earlier.
The company’s revenues climbed to S1.4 billion ($1.5 billion) in 2002 while net losses were slashed to $2.4 billion from $4.8 billion in 2001. The near-bankrupt company, which is on the brink of a critical restructuring, had cash flow of $309 million in 2002, up from a year-earlier loss of $176 million.
CEO John Riordan said the company had performed strongly during 2002, despite a challenging business environment. He credited continued cost control and significant operational efficiencies.
Riordan admitted, however, that subscriber growth in the second half of the year had been affected by the publicity surrounding the restructuring. The company claimed 248,000 new subs across Europe and a rise in spending per customer of 6% during the year to $14.68 per month.
Despite the relatively positive report, UPC is facing some hurdles in its restructuring. In its plan, U.S. parent company United GlobalCom, which is controlled by John Malone’s Liberty, would increase its share in UPC from 53% to 65.5% in a debt-for-equity swap.
The company claims most of its creditors back the restructuring. But creditor InterCom Holdings is taking UPC to a Dutch court today rather than accede to the plan.