Kabel Deutschland doubles profits amid Vodafone takeover bid

Germany's largest cable operator Kabel Deutschland released its latest earnings report Wednesday amid reports Vodafone will approach the company about a takeover bid.

Germany's largest cable operator Kabel Deutschland released its latest earnings report Wednesday amid reports Vodafone will approach the company about a takeover bid.

Vodafone was said to be waiting for the results before kicking off talks as early as this week.

Kabel should seem more attractive to Vodafone after the group doubled its net profit for nine months to December 31st 2012.

Net profits rose to €200m for the period, up from €100m a year earlier.

Sales rose 8.3% to €1.3bn, while adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) climbed 9.0% to €643m.

The corresponding EBITDA margin improved during the period to 47.2%, compared to 46.9% the year before.

Earnings per share came to €2.25, up from €1.11 in 2011.

The board proposed a dividend of €2.50, a 67% increase from €1.00 the previous year.

Strong demand for broadband and cable TV subscriptions boosted results during the period.

The total number of subscriptions rose from 840,000 to 14.1m year-on-year.

However, customer numbers fell from 8.7m to 8.5m due to a drop in the number of indirect cable subscribers who are supplied by other operators using Kabel's signal.

Looking ahead, the company said it expects continued revenue growth on the back of plans to spend an additional €300m to improve network infrastructure. It comes after a plan to buy Tele Columbus Group was foiled by Germany's antitrust regulator.

"With increased confidence in the market, we see a chance to advance network spending and to profit from its results," Chief Financial Officer Andreas Siemen said.

Shares rose 3.50% to €69.73 at 09:15 Wednesday 09:15 Wednesday.

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