Liberty Global has $560m accumulated loss in Irish businesses

Colorado-based cable company Liberty Global had almost $560 million in accumulated losses at its Irish businesses at the end of 2015 that could potentially be offset against future profits here.

This emerges in a recent 10-k filing by the listed company with the Securities and Exchange Commission in the United States.

It showed that in Ireland, Liberty carried forward tax losses of $558.5 million and had a related tax asset of $69.8 million. The filing states that these have no expiration date, unlike some other markets where its operates.

The Irish figure relates to cable TV and telecoms provider Virgin Media (formerly UPC Ireland).

While the figure for Ireland is substantial, it pales in comparison to the $21 billion in potential tax deductions available to the multinational for its Virgin Media business in the UK.

It also had $3.5 billion in tax losses for the Netherlands and $1.3 billion for the US. In total, the cable giant’s tax losses carried forward from its various global operations amounted to $29.4 million at the end of 2015.

The losses recorded by Virgin/UPC in Ireland reflect heavy capital investment by the company in its cable TV and broadband network, which provides some of the fastest internet speeds in the country.

The cable company has also undergone a major restructuring in recent years as it moved from being a provider of legacy analogue and MMDS TV services to supplying premium digital TV, high-speed wifi, and landline and mobile phone services.

Latest accounts for UPC Communications Ireland Ltd show that it made a pre-tax loss of €24.5 million in 2014, down from €35.5 million in the previous year.

Revenues rose by 1 per cent to €351 million in the year and the results were described as being in line with “management expectations”.

A spokeswoman for Virgin Media in Ireland said Liberty was fully compliant with all of its tax obligations here.

“Further to our multi-million euro investment, Virgin Media provides access to vital broadband and TV infrastructure which contributes positively to Ireland’s internet economy and the creation of jobs,” she added.

Liberty's filing shows that TV3, another Irish subsidiary, was valued at $116.4 million at the end of last year. This was the dollar equivalent of the sum paid by the company to acquire the Ballymount commercial broadcaster in 2015. Some $4.4 million of revenue from TV3 was included in Liberty's results for last year.

The purchase of TV3 from British private equity group Doughty Hanson was announced last July with Liberty paying an initial €80 million with an additional €7 million due if certain commercial targets are met in the future.

The filing also shows that Virgin Media had 149,500 Horizon TV subscribers in Ireland out of a total digital TV customer base of 311,200. Liberty’s document states that Virgin’s cable services served 23 per cent of the total television market in Ireland versus 41 per cent for satellite rival Sky.

Liberty also noted that it faced competition here from Eir, which provides triple-play telecoms services as well as an IPTV video product.

Eir had a 39 per cent share of the broadband market versus 32 per cent for Virgin, which increased its download speeds last year to enhance its competitiveness.

Liberty Global is owned by wealthy Irish-American John Malone, who has made a number of property investment s here in recent years. These include the five-star Westin Hotel in Dublin and the nearby four-star Trinity City Hotel, and the Castlemartin estate that was owned by Sir Anthony O'Reilly.