AMSTERDAM: Altice NV said its core earnings rose in the second quarter, as growth in the U.S. and Portugal offset a slowdown in France, where it continued to lose subscribers amid cut-throat competition.
The Netherlands-based multinational telecom company founded by billionaire entrepreneur Patrick Drahi reported Tuesday a 2.7% rise in adjusted earnings before interest, taxes, depreciation and amortization — a key measure watched by analysts — to EUR2.27 billion from a year earlier.
Second-quarter revenue fell 2.6% to EUR5.83 billion from a year earlier, hit by a renewed price war in France following a failed attempt at consolidating the market.
“It has been another commercially challenging quarter for SFR in France but we are confident the revenue and adjusted EBITDA trends will continue to improve,” said Altice Chief Executive Michel Combes. Altice-owned SFR is the second-largest telecom operator in France.
The results highlight the delicate balancing act that Mr. Drahi is having to perform between sharply reducing costs at his companies and reinvesting in their products to grow revenues.
Mr. Drahi has reached an agreement with two key unions to cut 5,000 jobs, or about a third of the workforce, at SFR by mid-2019. At the same time, Mr. Drahi has been investing heavily in networks as well as building a media and content portfolio that includes the rights to the English Premier League to entice new customers.
Adjusted Ebitda at SFR fell 6.8% to EUR999 million in the quarter as the company grappled with falling subscriber numbers. Revenue declined 4.3% to EUR2.78 billion. On Tuesday, Altice reiterated that it expects revenue in France to fall less sharply in 2016 than the year prior.
In the U.S., Suddenlink Communications posted a 16% increase in adjusted EBITDA to EUR258 million during the second quarter, its second full quarter under Altice control. Suddenlink’s revenue rose 3% to EUR566 million.
Altice said that Cablevision, its latest acquisition, saw its adjusted Ebitda rise 8.7% in the quarter to EUR471 million while revenue fell 1% to EUR1.43 billion. Altice merged Cablevision with Suddenlink in June to form Altice USA.
The company said its Portuguese unit’s adjusted EBITDA rose 23% in the quarter. The company, which kept its forecasts for the year, is currently in talks with potential buyers to sell its Belgium unit, according to Altice President Dexter Goei.
The company, which has been on an acquisition spree in recent years, again has said that it would use 2016 to integrate its assets and focus on improving the operational performance of its businesses.
