(Bloomberg) -- Altice International changed its earnings outlook for the year as Patrick Drahi’s embattled telecommunications empire continued to see parts of the business deteriorate.
The company is expecting earnings before interest, taxes, depreciation and amortization of about €1.6 billion ($1.7 billion) for the 2024 financial year, Altice International said in a statement Wednesday. The company had previously said it was expecting Ebitda to grow from 2023’s €1.86 billion, which included €157 million from the Teads business that was sold earlier this year.
Ebitda for the third quarter was €438 million, down 3.8% from a year earlier on a constant-currency basis. Revenue was €1.1 billion, a decline of 1.3% due to currency depreciation in the Dominican Republic and a worsening performance in Israel, the group said.
In Portugal, earnings were also lower, dragged by Altice Labs, due to lower demand from internal clients, mainly SFR and Altice USA, Chief Financial Officer Malo Corbin said during an earnings call on Wednesday.
Altice International’s €675 million bond due in January 2028 dropped almost 4 cents on the euro to 59 cents, the most since March, according to data compiled by Bloomberg.
The company has been looking to dispose assets to cut debt, which stood at €8.6 billion at the end of the third quarter. Earlier this year, it agreed to sell the video advertising platform Teads in a $1 billion deal with US ad company Outbrain Inc.
Management noted during the call that “infrastructure, data centres and real estate” in Portugal could be disposed of to help reduce leverage.
What Bloomberg Intelligence Says:
Altice International’s new guidance for full-year Ebitda of just €1.6 billion threatens to drive pro forma leverage to nearer 5.4x by the end of the year, “contrary to the company’s comments earlier this year that it would delever despite the 1Q shareholder payout and would be worse than our assumption of about 5x that already built in a degree of skepticism.”
Aidan Cheslin, senior credit analyst
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Altice International said Wednesday it has agreed the sale of its Geodesia unit’s construction activities in Germany to a related party. The agreement was signed Tuesday, with the transaction expected to close before the end of the year, according to the statement. The company didn’t say who the related party was.
The unit didn’t make a significant contribution to the company’s earnings, and was even slightly negative in the third quarter, Corbin said during the call.
Altice’s Portuguese unit is at the center of a corruption investigation involving Armando Pereira, co-founder of Altice and Drahi’s right-hand before his 2023 arrest. Altice has previously said it is a victim of the alleged wrongdoings and that it would collaborate with the judicial authorities.
--With assistance from Libby Cherry.
(Updates to clarify reviewed guidance in second paragraph.)
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