MADRID — Spanish pay TV giant Sogecable moved into the black for the first time since its merger with Via Digital, posting a S9.9 million ($11.9 million) net profit for the second quarter of 2005.
First-half revenues came in at $930.8 million, up 7.5% on a year earlier.
Sogecable’s profit surge was driven by cost contention. Subs decreased 40,000 in the April-June period, coinciding with the end of the soccer season. Its satcaster Digital Plus hiked clients by 124,000 in the first six months to 1.78 million.
Much of that increase came from 99,000 former subscribers to the analog version of Sogecable premium pay service Canal Plus that were tempted by cut-price offers to migrate to Digital Plus. Switchover campaign came at some cost, denting average rev per sub — which dropped from a high of $59.90 in the first quarter to a second-quarter $57.60.
“Both subs and revenues were somewhat lower than expected,” noted Glen Spencer Chapman of Ibersecurities.
Owned by Spanish media conglom Prisa (24.5%), giant telco Telefonica (23.8%) and Vivendi Universal (8.7%), Sogecable has restructured debt to lower financial costs, pulling in a significantly improved long-term credit facility worth $1.45 billion in July.
The syndicated loan replaced a financing line of $1.625 billion tapped in August 2003.
Sogecable stock, currently trading low, might well get a boost today if Spain’s government, as expected, uses its last Cabinet meeting before the August recess to authorize the relaunch of Canal Plus as a newly named and totally free-to-air analog broadcaster.
Spain’s current commercial broadcasters, Telecinco and Antena 3, are going gangbusters thanks to proficient management and a buoyant TV ad market. The Antena 3 Group just announced first-half net profits of $149.4 million. Most analysts think a revamped Canal Plus should be able to join this gravy train before Spain’s analog switch-off in 2010.