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Jul 30
2009
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Another cable company is cutting back on leverage and strengthening its balance sheet to weather the recession.
Kabel Deutschland released solid earnings results for the year in line with expectations, with earnings before interest, taxes, depreciation and amortization up 24.7% to EUR570.7 million compared with last year.
Unlike other cable companies like Cablevision that are also cutting back on leverage and cleaning balance sheets, Kabel increased capital expenditure to EUR373 million, a 17.9% rise compared to last year.
CreditSights noted that since it acquired Orion, its leverage has come down to 4.2 times EBITDA in March 2009 from 5.1 times in June 2008.
"Nationwide cable consolidation remains on hold for regulatory reasons, but potential in-region buys remain on the agenda for KDG," The CreditSight note added regarding the German cable market.
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written by Ronald Fink, July 30, 2009
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written by Marine Cole, July 31, 2009
That a large chunk of capex is proportional to the number of subscribers. The number of Cablevision's subscribers is going down so cutting capex isn't too big of a deal. But Kabel is in growth mode, especially thanks to acquisitions so their subscriber list is growing, which mean they have to keep increasing capex.
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