Altice lifted by stronger SFR showing and solid US results

Altice has seen a solid improvement in the performance of its French SFR business, which together with a strong showing from Altice USA contributed to better than expected Q3 results for the international cable and telecom group.

SFR improved its fixed-line performance and reduced churn, which it attributed to the introduction of new converged packages and an improved content offering, with the launch of new SFR Sport channels and the inclusion of English Premier League football exclusively in its content mix.

SFR also brought an exclusive drama series to its SFR Play on-demand offering with Les Médicis, Maîtres de Florence at the end of October.

The service provider added 44,000 customers to its fibre offering during the quarter.

The operator reduced its ongoing rate of mobile subscribers losses slightly, losing 73,000 mobile customers in the quarter against 82,000 last year.

Overall, SFR had 6.159 fixed customers at the end of the quarter, down from 6.259 million a year ago, and 14.489 million mobile customers, down from 15.083 million.

Altice confirmed that it had lodged an appeal with the Paris Court of Appeal against French market regulator the AMF’s ruling that it could not go ahead with its buyout of the part of SFR that it did not already own.

Overall, Q3 group revenue was flat at €5.9 billion, with SFR contributing €2.8 billion, down 2.4%. Optimum in the US contributed revenues of €1.44 billion, up 2.2% on a reported basis and 2.7% on a constant currency basis, while Suddenlink revenue was up 6.2% to €578 million on a reported basis and 6.7% on a constant currency basis.

Altice International, including the group’s Portuguese and Israeli interests, turned in revenues of €1.07 billion, down 1.1%. Portugal Telecom returned to revenue growth, with underlying growth of 1.2% excluding the impact of voice and SMS termination feed reductions imposed by the regulator and the impact of EU regulation on roaming tariffs. PT added 21,000 fibre customers and returned to subscribers growth in mobile.

Group EBITDA improved significantly, up 8.3% to €2.33 billion, with SFR EBITDA up 0.6% to €1.04 billion. Optimum EBITDA was up 33.1% on a constant currency basis to €516 million, while Suddenlink was up 20.2% to €268 million. International dragged slightly with EBITDA dropping by 3.1% to €489 million.

Altice USA contributed 41% of Altice’s operating free cashflow from 34% of revenue, with SFR contributing 38% of cashflow from 47% of revenue and Portugal Telecom/Meo 13% of cashflow from 10% of revenue.