The telco, owed by billionaire Patrick Drahi, reported a 2.7 per cent rise in adjusted earnings before interest, taxes, depreciation and amortization to €2.27 billion from a year earlier.
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Altice Group second quarter financials were pulled down by continued subscriber, revenue and earnings losses at French unit SFR, despite a solid performance elsewhere, including its new USA acquisitions.
The company said its Portuguese unit’s adjusted EBITDA rose 23 per cent in the quarter. The company plans to reduce 5,000 jobs at SFR by 2019 as it faces price competition from Iliad SA and Bouygues Telecom.
Altice, which owns French cable and telephone operator SFR SA, said trading conditions were hard in its main market though it stuck to existing profit forecasts for the full year.
Portugal Telecom/Meo also saw revenue fall by 3% – an improvement on the prior year – but EBITDA surged by 22.5%.
That move is likely to prompt further concern about Numericable-SFR’s growth prospects as rivals continue to scoop up subscribers. Broadband was its biggest market, with 7.150 million customers, compared to 6.883 million TV subscribers.
Altice insisted the earnings performance at Numericable-SFR would get better. Analysts projected adjusted Ebitda of 2.14 billion euros on sales of 5.76 billion euros, the average of estimates compiled by Altice.
Despite the concerns, investors appeared encouraged by the latest set of Group figures, with Altice’s share price trading up around 11% in Amsterdam at the time of publication.
“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’s Chief Executive Michel Combes.
Netherlands-based Altice has reported consolidated group revenues of EUR5.828 billion (USD6.461 billion) for the three months ended 30 June 2016, down 2.6% on an annualised basis.
Altice is considering selling its Belgian business to focus on bigger operations in markets such as the US and France, a person familiar with the situation said last month.
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“It increases cash flow to pay down debt in the shorter term but results in a loss of competitiveness and hence a declining customer base and falling revenues as well as demotivated employees and contractors who feel they have been cheated”, wrote Roetter in an article on Seeking Alpha’s website earlier this month.
