Altice International - comment

Underlying results reported yesterday were a non-event as the Company continue to grow both top-line and EBITDA as per guidance. With no major debt maturities before 2027 and net leverage likely to be below 4.5x at year-end, it is not surprising that the bonds found a bid, especially with management confirming the strategic review continues for its Portuguese, Dominican Republic and Teads assets, for which we expect an update at next reporting cycle.  

But, but, but.   As always with the Altice structure, everything is not as it appears.  Outside management control, the impact of the war in Israel is very difficult to assess.  Management stated there has been no material impact on its infrastructure yet.  What is in management’s control is its aggressive reporting of free cashflow which was reported as positive at c.€40m, but that is before cash outflow for reverse factoring of c.€60m and €30m from corporate costs.  

In addition, Altice International’s subsidiary Geodesia raises some questions.  Geodesia is contracted for the majority of the fibre roll-out by a 50:50 JV with Vodafone.  The JV is outside the restricted group.  Related cashflow is excluded from Altice’s reporting metrics but revenue by Geodesia is recognised in the Business services in its Portuguese operations.