This year Telefónica will receive more than 950 million Virgin O2 distributions | comp

Virgin Media O2, the British subsidiary of Telefónica and Liberty Global, will consolidate itself as one of Spain’s largest cash-generating companies. The new telecoms company, which was officially established on June 1, 2021, announced on Friday that it expects to pay a dividend of 1,600 million pounds (about 1,916 million euros) to its shareholders for 2022, including money from recapitalization, and maintain a leverage ratio. Between four and five times the EBITDA.

In this way, Telefónica will receive just over 950 million euros, given its participation in the UK operator, one of its strategic markets, along with Germany, Brazil and Spain.

Virgin Media O2 said in its financial report that it paid its shareholders a total of 322 million pounds (about 386 million euros) in the fourth quarter of last year.

In 2021, Virgin Media O2 recorded initial revenue of 10,383 million pounds (about 12,450 million euros) in 2021, 1.2% lower than the previous year, as a result of lower revenue in the mobile business and in the fixed line business.

Virgin Media O2’s adjusted EBITDA rose 1.9% to £3,673 million, according to the company, as a result of some cost reductions as a result of restrictions approved to deal with Covid-19 during the first half of the year. .

Looking ahead to 2022, Virgin Media O2 expects mid-single-digit primary growth in adjusted EBITDA, supported by business growth and generation of synergies.

In addition, the operator launched new strategic lines in the face of its competition with BT. Thus, Telefónica and Liberty began negotiations with various potential financial partners for their fiber optic business. The goal of the new entity is to build a fiber network that will cover another seven million real estate units. Virgin Media O2 will be the main client of the network that seeks to reach 30% penetration in different geographies. The network will be available to other operators through wholesale agreements.

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With this new investment vehicle, Virgin Media O2 will expand its goal of expanding infrastructure with gigabit access to 23 million homes.

This way, broadband providers such as TalkTalk or Sky will have the option to contract with the wholesale service of Virgin Media O2’s fiber network, which is positioned as an alternative to BT. The current British company plans to expand the fiber to 25 million real estate units by the end of 2026.

Postings

In this race, subsidiary Telefónica and Liberty Global completed the planned deployment of the aforementioned gigabit network, reaching 15.6 million homes in the UK during the fourth quarter. “This means that this speed is now available in half of the property units in the UK, with Virgin Media O2 being the main contributor to the government’s broadband plans,” the operator said.

Regarding the 5G network, the communications indicated that it is already available in 2,000 locations in the UK, in 300 cities and towns. The goal of telecommunications is to reach 50% of Britain’s population in 2023.

Virgin Media O2 indicated that in 2021 it acquired 142,000 new fixed broadband customers, 53,000 of them between October and December, its best quarter in six years.

On mobile, it added 2.7 million connections, including wholesale and inter-device lines. In the fourth quarter, it acquired 129,000 new mobile contract customers. Noting that the company is experiencing a moment of strong commercial performance, CEO Lutz Schuler noted that the number of fixed broadband customers with mobile phones has grown by 45%. The director noted that the company launched its first comparable prices for fixed and mobile phones in the fall, under the Volt brand.

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Synergy is a priority for freedom

mergers. Mike Fries, CEO of Liberty Global, Telefónica’s partner at Virgin Media O2, emphasized that generating synergies remains a priority for the company in countries such as Switzerland and the UK, where it has implemented integrations. The director noted that the mergers of both countries are fulfilling the planned plans.

Procedures. In a presentation of Liberty Global’s 2021 accounts, the CEO noted that the company expects distributable cash generation to grow 22% in 2022 to reach $1,700 million. Fries explained that Liberty repurchased its own shares of more than $1,600 million in 2021, and reiterated the commitment to continue these bonuses and acquire 10% of the company’s shares between 2022 and 2023.

Enter. Liberty Global reported revenue of $10,311 million in 2021, 10.7% lower in terms of reporting due to changes in ocean, and 1.5% more in terms of reporting. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 1.4%. Liberty highlighted its financial strength, noting that it maintains a total liquidity position of 5.9 billion euros.

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