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Altice Europe maintains 2020 outlook despite 'challenging backdrop'

Altice Europe, owner of SFR in France and MEO in Portugal, said it currently sees no reason to change its guidance for 2020, although it acknowledged that the situation had been challenging in the first quarter of the year because of the COVID-19 pandemic.

Patrick Drahi, founder of Altice Europe, said that overall the group has achieved a "solid start to 2020" and that he expects "to build on this over the rest of 2020." During the year, the group expects to accelerate service revenue growth in its key geographies and increase revenue and EBITDA.

Altice Europe did not emerge fully unscathed from the health crisis: It noted that the lockdown delayed construction of fiber-to-the-home (FTTH) networks, while equipment sales were lower owing to shop closures, and roaming and advertising were adversely affected. It said the guidance assumes lockdowns are lifted during the second quarter of 2020, and a gradual economic recovery thereafter.

In the first quarter of the year, the group was nevertheless able to increase revenue on a reported basis by 3.6% year-on-year to €3.63 billion (US$3.98 billion). In France, revenue rose by 3.6% to €2.64 billion ($2.89 billion), while in Portugal it grew 2.6% to €522 million ($572 million). Altice is also active in the Dominican Republic and Israel, and it lists Altice TV and online video advertising unit Teads as separate segments.

Group adjusted EBITDA increased by 1% on a reported basis to €1.31 billion ($1.43 billion). Total capex in the quarter fell 6.3% to €722.3 million ($792 million).

Altice Europe still operates with a fairly high level of debt. Total consolidated net debt stood at €31.2 billion ($34 billion) at the end of March 2020. The group noted it has already achieved €470 million ($517 million) of annual savings out of the targeted amount of €700 million ($770 million).

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— Anne Morris, Contributing Editor, Light Reading

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