By Natalia Drozdiak

FRANKFURT--German pay-TV company Sky Deutschland AG (SKYD.XE) Wednesday said its second-quarter net loss widened due to higher interest payments, despite stronger subscriber growth.

Net loss for the quarter widened to 2.5 million euros ($3.34 million) from a loss of EUR0.9 million a year ago, disappointing analyst expectations of a profit of EUR1 million. The company said increased interest payments on loans weighed on the result. Sales rose 14% to EUR428 million from EUR375million, just slightly below analyst expectations of EUR429 million.

In July British Sky Broadcasting Group PLC (BSY.LN) bought a 57.4% stake in Sky Deutschland and all of Sky Italia from Rupert Murdoch's 21st Century Fox for $9 billion, to create a pan-European pay-TV giant with around 20 million customers across Germany, Italy, Austria, the U.K., and Ireland. BSkyB has launched a voluntary cash offer for the rest of Sky Deutschland's shares at EUR6.75 per share.

21st Century Fox was until June 2013 part of the same company as News Corp, owner of The Wall Street Journal and Dow Jones Newswires.

Sky Deutschland said earnings before interest, tax, depreciation and amortization, or Ebitda, rose 23% to EUR45 million from EUR37 million the year earlier, in line with expectations.

Direct subscribers rose 82,000 to 3,813,0000, up 10% from the year earlier period.

The second quarter marks the end of Sky Deutschland's shortened fiscal year. For the current full financial year, ending next June, the company expects Ebitda between EUR80 million and EUR110 million, supported by strong growth in overall revenues. It sees subscriber net growth of between 400,000 and 450,000.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

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