BRUSSELS Oct 18 Dutch cable group Ziggo
said its core profit fell in the third quarter
despite winning more customers, as it spent more on marketing
and promotions to keep up with its rivals.
Ziggo, which earlier this week rejected a takeover proposal
from top shareholder Liberty Global, said on Friday it
more than doubled spending on marketing and sales compared with
the third quarter of last year, depressing its core profit
margin by 3.3 percentage points.
The group, which competes for telephone, TV and broadband
internet customers with the likes of KPN, reaped the
fruit of its spending, however.
It added more customers for all of its services compared
with the second quarter apart from analogue TV, which in general
is a business that cable companies are keen to phase out.
Core profit in the third quarter fell 2.9 percent to 220.4
million euros ($301.2 million), just below the 222 million euros
expected in a Reuters poll of five analysts.
Ziggo reiterated its revenues in 2013 would grow by 1
percent, with core profit (earnings, before interest, tax,
depreciation and amortisation) remaining at last year's levels.
The group's shares rose 1.5 percent in early trading, making
them the strongest performer on the STOXX 600 European Telecom's
"Ziggo posted strong broadband growth, and this could point
to higher growth in the market overall," Bernstein analyst Robin
Bienenstock wrote in a note to clients.
Ziggo gave no further update on the state of the talks with
Liberty Global, after it said on Wednesday that Liberty had
approached it about a full takeover which it deemed inadequate.
Unlike Dutch telecoms group KPN, which fended off a bid by
Mexican group America Movil with the help of an
independent foundation, Ziggo had no such structure in place,
Chief Executive Bernard Dijkhuizen told a conference call
He added, however, that the group's internal corporate
governance rules did not allow for an outsider to gain control
"We have a structure that in itself has a defence mechanism
in there which makes it less probable that any party does
something aggressive which we don't want," Dijkhuizen said.
He said that this would not be able to stop a hostile bid.
"If there would be a hostile takeover then the shareholders
will speak," said Dijkhuizen, who will be replaced by former
Deutsche Telekom boss Rene Obermann in 2014.