Below are my key takeaways from the Altice Q2 2016 Earnings Call on Aug 9:
Summary of US Businesses:
Michel Combes, CEO, said, “Altice has completed its transformation into a leading integrated transatlantic operator. All of our businesses are showing a positive trend.”
Acquired Optimum (Cablevision) and their 3.1MM customers for $17,700MM, making them the 4th largest US cable provider. Last year they acquired Suddenlink and their 1.5MM customers for $9,100MM. (See below for US footprint).
Optimum revenue in the quarter was $1,618MM, up slightly YoY from $1,600MM. EBITDA was $532MM (32.9% margin) vs. $479MM (29.9% margin) in Q2 2015. Best quarter since 2012 with unique customer additions and slight loss of video customers.
Suddenlink revenue grew 5.3% to $640MM. EBITDA grew 18.7% to $292MM EBITDA (45.6% margin), from the $246MM EBITDA (40.5% margin) in Q2 2015. Showed growth in unique residential customer relationships.
Altice US Footprint: Via Optimum and Suddenlink
| Financials (In millions) | Q2 2016 | Q2 2015 | % Diff |
| Total Revenue | $6,689 | $6,635 | 0.8% |
| Adjusted EBITDA | $2,560 | $2,434 | 5.2% |
| EBITDA Margins | 38.3% | 36.7% | 4.3% |
| Optimum Revenue | $1,618 | $1,600 | 1.1% |
| Adjusted EBITDA | $532 | $479 | 11.1% |
| EBITDA Margins | 32.9% | 29.9% | 9.8% |
| Suddenlink Revenue | $640 | $608 | 5.2% |
| Adjusted EBITDA | $292 | $246 | 18.5% |
| EBITDA Margins | 45.6% | 40.5% | 12.8% |
| Optimum Metrics (In thousands) | Q2 2016 | Q2 2015 | % Diff |
| Homes Passed | 5,098 | 5,067 | 0.6% |
| Fiber/Cable Customers | 3,148 | 3,117 | 1.0% |
| – Net Adds | 19 | 5 | |
| – Pay TV | 2,577 | 2,637 | -2.3% |
| — Net Adds | -2 | -16 | |
| — Penetration | 51% | 52% | |
| Broadband | 2,854 | 2,781 | 2.6% |
| —Net Adds | 26 | 14 | |
| —Penetration | 56% | 55% | |
| Telephony | 2,181 | 2,208 | -1.2% |
| —Net Adds | -4 | -7 | |
| —Penetration | 43% | 44% | |
| Fiber/Cable ARPU | $159.89 | $159.48 | 0.3% |
| Suddenlink Metrics (In thousands) | Q2 2016 | Q2 2015 | % Diff |
| Homes Passed | 3,223 | 3,184 | 1.2% |
| Fiber/Cable Customers | 1,481 | 1,439 | 2.9% |
| – Net Adds | -8 | -13 | |
| – Pay TV | 1,062 | 1,103 | -3.7% |
| — Net Adds | -23 | -29 | |
| — Penetration | 36% | 38% | |
| Broadband | 1,251 | 1,181 | 5.9% |
| —Net Adds | -2 | -3 | |
| —Penetration | 42% | 41% | |
| Telephony | 591 | 558 | 5.9% |
| —Net Adds | -1 | 1 | |
| —Penetration | 20% | 19% | |
| Fiber/Cable ARPU | $116.50 | $113.92 | 2.2% |
List of Key Properties:
- Optimum (Cablevision)
- Suddenlink
- France SFR
- Portugal MEO
- Israel HOT
Forward Thinking:
- Suddenlink will focus on optimizing customer service, improve retention, reduce churn, and upgrade the network to enhance broadband bundles
- Suddenlink will push Operation GigaSpeed, their goal of having top high speed rates of 1Gbps in 90% of Footprint by 2017
- Optimum is committed to improving broadband speeds and will work towards goal of delivering 300Mbs broadband to entire footprint by 2017
Links to Company Website:
Please comment below if there are data points from Altice you’d like me to include in their next Earnings Call Summary.
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