freenet fails to hold on to subscribers in 1Q

14 May 2009

German multi-service operator (MSO) freenet has posted its fiscal results for the three months ended 31 March 2009, recording a 142.3% year-on-year rise in revenue to EUR912 million (USD1.24 billion), up from EUR376.4 million in the same period of 2008. The group’s acquisition of rival operator debitel in July 2008 is the main driver behind its leap in revenue over the same period a year earlier. Compared with the fourth quarter of 2008, however, freenet saw its revenue drop by EUR178.1 million, mostly due to lower mobile revenue. Meanwhile, gross profit and earnings before interest, tax, depreciation and amortisation (EBITDA) for 1Q 2009 also increased year-on-year; gross profit more than doubled, from EUR98.5 million in the first three months of 2008 to EUR206 million at 31 March 2009, while EBITDA rose 57.9% to EUR81.8 million against EUR51.8 million in the same period a year earlier. However, gross profit decreased by EUR15.7 million when compared with the final quarter of 2008. The group’s result from continued operations, excluding its DSL business which is currently up for sale, declined year-on-year, from EUR27.1 million to EUR10.6 million due to bank loans taken on as part of the debitel acquisition. A cash flow from operating activities of EUR115.9 million was generated by freenet in the first quarter of 2009.

freenet’s customer numbers continued to fall quarter-on-quarter. During the first three months of 2009, the company’s total subscriber base declined by around 770,000 to 22.52 million. Mobile customers totalled 18.53 million, down 3.2% on the previous quarter, while DSL customers declined by 38,000 to 906,000 during the first three months of 2009.

Germany, freenet