Altice’s debt spikes. Meo recorded a €503m turnover
Altice Europe, the owner of the Portuguese operator MEO, has reached a revenue of €3.5bn during the second trimester of the year. That means the company had a break-down in profits of around 1.4%.
The results were announced this Thursday morning, by the telecom multinational. The group registered €3.47bn in revenue by the end of the second trimester, which represents a fall of 3.4% in comparison to the revenues recorded in the prior trimester. At the same time, it has seen its net debt rise.
In Portugal, where Altice has bought control over the old PT Portugal, known as MEO, the revenue achieved was close to €503m, 1.6% more than what had been accomplished during the previous trimester.
When compared with the same trimester last year, Altice’s revenues in Portugal have stepped back by 5.4%.
Altice Portugal’s Profits
Net results per trimester, in millions of euros
Source: Altice 02/08/2018
Even though there has been a break in revenue, Altice Portugal was able to increase its EBITDA (earnings before taxes, depreciation, and amortization), which stood at €1,315m, 4.4% more than last year.
At the same time the revenue fell, Altice’s debt increased. The company is going through a restructuring process that aimed to reduce its high indebtment level. By the end of June this year, the net debt stood at €31,858m, 1.7% more than what was registered at the end of March.
Altice is maintaining their prospects for this year, even though results have been dire. In light of these developments, the company’s shares devalued in Amsterdam. Assets fell around 14.5%. They are now diminished by 11.43%, standing at €2.549 per share.
Altice Europe will use dividends from Altice USA to cover debt
During a phone conference with analysts, Dennis Okhuijsen, Altice Europe’s CFO, explained that the company intends to use the North-American company’s dividends to cover for the debt that is stressing Altice Europe. After the spin-off, Altice Europe still detained 3.5% of Altice USA.
The CFO wanted to make sure analysts would pay attention to one specific detail: by the end of the second trimester of 2017, 78% of the debt was due to be paid off by 2015, whereas now only 53% will be covered that year.
This number is also frightening for investors, which have been progressively losing trust in the French company. The fall in revenue scared analysts as well, that pointed out that the company could be starting to have liquidity issues. By then, Altice’s debt was standing at €50bn, which forced the company to elaborate new strategies and sell some of their assets.
Amongst those assets, there were two towers of communications – in France, and Portugal. They also wanted to sell their unit in the Dominican Republic, which had 1049 telecom towers. But the offers were not attractive enough. The transaction wouldn’t be cost-efficient, and Altice noted this Thursday that this subsidiary was showing a great financial performance.
The CFO and the CEO, Alan Weill, showed enthusiasm about their company’s new telecommunications infrastructures that have been financed by the sale of the French and Portuguese towers. As ECO showed, the towers were sold to a business consortium, constituted by Pires de Lima and Sérgio Monteiro.