Liberty Global plc announced its third quarter earnings on Thursday afternoon, including results for the LiLAC Group (NASDAQ:LILAK), which represents Chilean and Puerto Rican operations. The results were well received by the market, with shares of the LiLAC Group gaining over 2% on Friday.

The raw numbers


Q3 2015 Results

YoY Growth


$309 million

Rebased*: +7%

Operating cash flow

$128 million

Rebased*: +10%

Operating cash flow



*Removes the impact of acquisitions and foreign exchange. Source: Liberty Group

What happened with LiLAC Group this quarter?

  • Total RGUs (revenue-generating units) rose 8.2% year-over-year to 3.49 million, with the number of customers rising 10% to 1.66 million, for an average number of products per customer of 2.1.
  • Chile posted rebased revenue growth of 7% year-over-year, while Puerto Rico achieved 6%. The Puerto Rican B2B activity was particularly strong, growing at more than 20%.
  • Similarly, operating cash flow growth for the quarter was relatively even between Chile and Puerto at 11% and 9%, respectively.
  • LiLAC Group's attributed debt at the end of the third quarter was unchanged over the previous quarter at $2.3 billion. The attributed cash balance improved by $6 million to $239 million.

What management had to say
Liberty Global CEO Mike Fries provided a (characteristically) upbeat summary of the group's results for the press release:

In Latin America and the Caribbean, we reported another strong set of results, including robust subscriber growth, 7% rebased revenue and 10% rebased OCF [operating cash flow] growth in Q3. Our fast-growing LiLAC operations in Chile and Puerto Rico, together with our scale opportunity and improving demographics in this region of the world, make [the LiLAC tracking shares] an exciting investment vehicle.

During the conference call, Mr. Fries added:

LiLAC reported another strong quarter of organic RGU additions, adding 24,000 in the quarter, now 100,000 year-to-date. Chile nearly double RGU additions compared to last year and helped by a new bunding offer of 50 HD channels and broadband speed to 40 MGb in that market, and even Puerto Rico added customer relationships, 6,000 of them in the quarter.

[...] LiLAC grew 7% over the last two quarters and has great momentum and broadband bundles are killing the competition.

Looking forward
The LiLAC Group does appear to have picked up some momentum in the third quarter. Management is vaunting the strength of its bundles, but note that the average products per customer relationship has fallen year-over-year from 2.14 to 2.10 (although it is stable relative to the end of the second quarter). Investors will want to see more evidence that the LiLAC Group can maintain its competitive position and continue to capitalize on the favorable demographics in these regions.

Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends Liberty Global and Liberty LiLAC Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.