Net?s first-quarter financial statements, released Thursday, May 16, show significant growth in sales of pay-per-view programs (PPV) during the period but the overall numbers remained critically weak for the MSO, known until recently as Globo Cabo. Net revenue totaled 286.7 million reals, down almost 1% compared with the last quarter of 2001. EBITDA rose 4.3% in the quarter to 70.7m reals but the bottom line was a net loss of 83.3m reals, more than double the loss in Q4 2001. Net loss in fact increased 106.3% owing to the impact of devaluation, which distorted the Q4 numbers. Net debt remained unchanged on 1.52bn reals, 55% in foreign currency. Short-term debt amounted to 588m reals; most of it is due in June 2002, with a smaller proportion falling due by March 2003. Net worth remained negative on minus 75.5m reals.
ADR loses 3%
U.S. investors took fright again at the news. On Nasdaq, the former Globo Cabo?s ADR lost about 3%, closing on $1.22. The first-quarter financials showed strong growth in pay-per-view sales, up 44% year over year to 15 million reals. Programming expense corresponded to 34.5% of gross revenue, slightly less than in the last quarter of 2001 but well above the historical average (29%). Subscriptions accounted for 85.2% of total revenue, followed by PPV 4.3%, corporate services 3.8%, Vírtua (broadband Internet) 2.5%, and membership fees 2%. Average revenue per subscriber was 75.50 reals. The subscriber base ended March on 1.4 million. Churn was about 21% per year in the period. Management announced that meetings with analysts to discuss these results will be held when strategic growth proposals and the recapitalization road show are ready. This was taken to mean the new business plan is almost ready.