Altice France S.A. Downgraded To 'B-' On Increased Interest Cost And Negative Free Cash Flow; Outlook Stable

Telecommunications operator Altice France S.A. has delivered mixed results for 2022, with revenue growing 1.8% but reported EBITDA (after leases) declining by 4% year-on-year. In 2023, we forecast 0%-1% year-on-year revenue decline and largely stable EBITDA (after leases). The ratings are constrained relative to 'B' rated peers by a high debt burden that has continued increasing since 2020, persistently negative free operating cash flow (FOCF) after leases, deteriorated cost of refinancing conditions in a rising interest environment, and a lack of significant pricing power in the fiercely competitive French market. We therefore forecast Altice France's S&P Global Ratings-adjusted debt to EBITDA will stay elevated at about 7.0x, its adjusted EBITDA cash interest cover ratio will temporarily decline to slightly less

...April 26, 2023 - Telecommunications operator Altice France S.A. has delivered mixed results for 2022, with revenue growing 1.8% but reported EBITDA (after leases) declining by 4% year-on-year. In 2023, we forecast 0%-1% year-on-year revenue decline and largely stable EBITDA (after leases). - The ratings are constrained relative to 'B' rated peers by a high debt burden that has continued increasing since 2020, persistently negative free operating cash flow (FOCF) after leases, deteriorated cost of refinancing conditions in a rising interest environment, and a lack of significant pricing power in the fiercely competitive French market. We therefore forecast Altice France's S&P Global Ratings-adjusted debt to EBITDA will stay elevated at about 7.0x, its adjusted EBITDA cash interest cover ratio will temporarily decline to slightly less than 3.0x, and it will continue to report negative FOCF after leases in 2023. - The ratings also factor in continued discrepancy between Altice France's effective...

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