Altice’s French unit shows re­cov­ery signs

Viet Nam News - - WORLD BUSINESS -

PARIS — Altice Europe’s French unit showed the first signs of re­cov­ery in the first quar­ter, the tele­coms and cable group said yes­ter­day as it hoped to re­verse a loss of in­vestors’ con­fi­dence that has bat­tered its shares since last year.

The debt-rid­den com­pany said its main SFR divi­sion, France’s sec­ond-big­gest tele­coms com­pany, added broad­band cus­tomers for the first time since Altice founder and ma­jor­ity owner Patrick Drahi bought it in 2014.

Rev­enue in France con­tin­ued to de­crease in the first quar­ter from a year ear­lier, but at a slower pace than in the prior quar­ter.

SFR’s lack of growth de­spite huge in­vest­ments in its net­works had sparked con­cerns about Altice’s abil­ity to in­crease rev­enue and mar­gins to re­pay its 50 bil­lion euro debt, ham­mer­ing shares and prompt­ing the com­pany to split its US and Euro­pean op­er­a­tions.

“In the first quar­ter of 2018, Altice Europe has started to de­liver on his op­er­a­tional turn­around plan, show­ing the best sub­scriber trend Altice has ever re­ported,” Chief Ex­ec­u­tive Dex­ter Goei said in call with re­porters.

The French unit added 71,000 fixed sub­scribers in the first quar­ter, bring­ing the to­tal to 6 mil­lion. It also added 239,000 mo­bile cus­tomers over the same pe­riod, its best quar­terly per­for­mance on record.

SFR’s quar­terly rev­enue de­creased on a yearly ba­sis, by 1.1 per cent to about 2.6 bil­lion eu­ros (US$3.07 bil­lion).

Growth is ex­pected as the com­pany adds broad­band cus­tomers, in par­tic­u­lar those opt­ing for the more prof­itable fiber tech­nol­ogy, and loses fewer sub­scribers.

Altice’s per­for­mance in the fixed busi­ness con­trasted with that of ri­val Iliad, whose shares plum­meted af­ter ad­mit­ting it had lost broad­band cus­tomers for the first time.

Heavy in­vest­ments on fixed net­works, com­bined with pro­longed heavy pro­mo­tions by SFR and com­peti­tors Iliad, Or­ange and Bouygues Tele­com, have led to cut-throat com­pe­ti­tion in the French tele­coms sec­tor.

“There’s go­ing to be a bat­tle be­tween the four on the mar­ket in 2018,” said Xavier Buf­fon, an an­a­lyst at S&P who cov­ers Altice.

Altice Europe’s to­tal rev­enues re­mained flat over the quar­ter on a con­stant cur­rency ba­sis at 3.53 bil­lion eu­ros. Core oper­at­ing profit dipped by 0.5 per cent on the same ba­sis to about 1.3 bil­lion eu­ros.

The sale of as­sets Altice deems non-es­sen­tial, such its Do­mini­can Repub­lic unit and French and Ger­man tow­ers, will be fi­nal­ized in the sec­ond half, Altice said.

The group con­firmed but ad­justed its full-year guid­ance to re­flect the adop­tion of a new ac­count­ing stan­dard. It said its sep­a­ra­tion with Altice USA will be ef­fec­tive early June. — REUTERS

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