MADRID: Pan-European pay TV giant Sky, in which Rupert Murdoch’s 21st Century Fox owns a 39 percent stake, on Thursday reported higher fiscal first-quarter revenue and slower subscriber growth than in the year-ago period.
“As expected, we had a quieter start to trading due to [soccer tournament] UEFA Euro 2016 and the Summer Olympics, offset by a stronger September, meaning we go into our second quarter with good momentum,” the company said.
Revenue for the quarter that ended on Sept. 30 rose 13 percent to $3.77 billion (£3.10 billion) as the stronger euro boosted the company’s euro revenue. Overall revenue increased 7 percent when assuming constant currencies, or 5 percent on a comparable basis excluding special items. The company didn’t report profit figures, but said it had a “strong start to the year” on cost efficiencies with operating costs down 2 percent.
Industry watchers have said that increasing programming costs for sports rights would put pressure on Sky’s financial growth, with this year in particular seeing a hit from a new English Premier League soccer rights deal. But UBS analyst Polo Tang said that Sky’s comments on cost trends were encouraging, “implying that earnings before interest, taxes and amortization may only be down modestly for the quarter despite the step-up in Premier League costs.”
Sky also said that with the U.K. advertising market having been weaker in the latest quarter, the company’s U.K. ad revenue declined 3 percent. It added that its business was “on track against full-year expectations.”
The pan-European pay TV giant, in which Rupert Murdoch’s 21st Century Fox owns a 39 percent stake, is led by CEO Jeremy Darroch.
The company signed up 106,000 new subscribers in the latest period, compared with 134,000 in the year-ago quarter. In the U.K. and Ireland, it added 35,000, down from 77,000 in the year-ago period. In Germany and Austria, Sky added 49,000 customers, down from 94,000 in the fiscal first quarter of 2015. But Italy achieved its fourth consecutive quarter of growth, adding 22,000 customers – the highest rate of fiscal first-quarter growth in four years.
