Sogecable kicks up profits

Revs rose 41% to $452.6 mil partially due to soccer

By JOHN HOPEWELL

MADRID -- Spain's main pay TV operator, Sogecable, posted positive first quarter results Friday, reflecting a solid emergence from the complex merger of its satcaster Canal Satellite Digital with rival Via Digital last July. Merger lead to the integrated digital TV platform Digital Plus.

Net revenues rose 41% to E379.4 million ($452.6 million) compared to first quarter 2003, before the merger. Earnings before interest, taxes, depreciation and amortization (EBITDA) spiked 116.5% to $76.5 million.

Sogecable posted net losses of $56.9 million, up from $20.5 million in Q1 2003, partly because of amortization on and the increased cost of soccer rights.

Soccer played a large part in Sogecable's early 2004 fortunes.

With sports rights brokerage company Audiovisual Sport fully consolidated in the company results from Q3 2003, operating results were hit by amortization on start-up payments for the acquisition of soccer rights when AVS was launched, as well as depreciation charges on set-top boxes bought by CSD and Via Digital in the first years of operations.

Also, given Sogecable's upping its stake in AVS from 40% to 80% as part of the merger, the now fully consolidated cost of Spanish soccer league and cup rights rose from $47.0 million, Q1 2003, to $125.3 million a year later.

One question still facing Sogecable is how many of the remaining subscribers which still have low-cost contracts signed with Via before the merger -- currently some 100,000 -- will migrate to Digital Plus once their contracts run out through June.

Sogecable shares rose 6% to $43 on Madrid's stock exchange after the announcement of Q1 results.