Altice Europe bets on French rebound to repay debt after promotions hit profit
By Mathieu Rosemain and Pascale Denis
PARIS, March 28 () - Telecoms and cable group Altice Europe is betting on a rebound of its French business to speed up debt repayments after a year of heavy promotions took a toll on its profits.
The Amsterdam-listed group founded by billionaire Patrick Drahi has flipped its strategy from cost-cutting towards gaining clients and selling infrastructure assets in a bid to lift its stock price after a sudden loss of investor confidence.
The group's SFR brand in France managed to gain more than 1 million mobile customers as well as 233,000 broadband clients last year through aggressive offers.
Yet Altice Europe's core operating dropped by 8.9 percent over the period to 5.1 billion euros, with its margin falling to 36.2 percent from 38.7 percent a year before.
In a possible sign that it was reluctant to reveal the impact of this market share drive, Altice Europe unexpectedly declined to disclose its average revenue per user (ARPU) -- a key performance indicator in the telecoms industry -- for both its fixed and mobile business.
Still, Altice Europe said it managed to fulfil its full-year operating free cash flow target of 2.36 billion euros, including 1.52 billion for its French subsidiary.
It also pointed to its asset sale programme that paves the way for a reduction of its net debt. Last year, it raised some 4 billion euros from selling stakes in its towers businesses in France and Portugal.
Altice Europe also sold part of its French fibre network to a consortium of Allianz Capital Partners, AXA Investment Managers and OMERS Infrastructure in November.
"We continue to explore similar deals in our footprint," Drahi said in a statement.
Altice Europe said it expected its French business to grow between 3 and 5 percent in 2019 and to generate a core operating profit of between 4-4.1 billion euros.
($1 = 0.8902 euros)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.