Altice SFR France - comment

Headlines are going to focus on restricted versus unrestricted entities, our initial comments are on operations.  We had suspected the poor guidance issued in March at the year-end call was very cautious, but Q1 results are as bad as guided. Revenue was down 4%, EBITDA down 6.5% with leverage now reaching 6.5x on LTM basis.  Although Operating Cashflow was ahead of guidance due to some working capital movement and lower CAPEX levels, expectations for remainder of year is further weakness (Company are guiding to high single-digit decline in EBITDA) which will further increase leverage multiples.   

Altice SFR has appointed Lazards as financial adviser and retained JPMorgan to assess liability management alternatives.  The Company did not hold a Q&A as part of their Q1 call, electing to only share prepared comments. This continues to leave significant questions in relation to entities that have moved outside of the restricted group, and the impact this has on creditors.