(Bloomberg) -- Altice International’s revenue in Israel is set to take a hit in the fourth quarter because of the Israel-Hamas war.
The company expects a negative effect on results in Israel, “the extent of which cannot be quantified at this stage,” it said in an earnings report. Altice International is made up of Israel’s Hot Telecommunication Systems Ltd., as well as assets in Portugal, the Dominican Republic and online video advertising company Teads. Israel accounted for about 21% of the firm’s revenue in the third quarter.
“Hot is affected by a reduction of revenue in the fixed segment (subscription fees have been frozen for the evicted Israeli population in the South and in the North of the country) and in the mobile segment (reduced equipment sales due to closing of shops, prepaid revenues and roaming as less customers are traveling abroad and less visitors are coming to Israel),” Altice said in the statement. Billionaire owner Patrick Drahi has Israeli citizenship and often lives in Tel Aviv.
The results come as Drahi attempts to sell off parts of his telecom empire to reduce the $60 billion in debt accumulated by the group through years of aggressive acquisitions. It’s also grappling with a corruption probe in Portugal that’s targeted some of Drahi’s key executives. The company said last week that internal corruption investigations found violations would have “no material impact” on its subsidiaries’ financial statements.
The situation in Israel hasn’t changed the asset sale process, said Dennis Okhuijsen, a senior adviser with Altice Group, in Tuesday’s earnings call. “We have started the processes in Portugal, Dominican Republic and Teads. We will be able to share our thoughts in the first quarter of next year in those three processes.”
Altice International bonds due January 2028 gained 1.9 cents on the euro to 80 cents, according to data compiled by Bloomberg.
Here’s some details of Altice International earnings for the quarter ending in September:
- 3Q revenue €1.288 billion vs. €1.296 billion y/y
- 3Q Ebitda €476 million vs. €458 million y/y
- Leverage down to 4.6 times earnings from 4.8 times in 2Q
- FY23 Ebitda and operating free cash flow are expected to grow broadly in line with 1H performance of +7% y/y for Ebitda and +13% y/y for operating free cash flow on a constant currency basis, including impacts from the war in Israel
The French arm of Altice is due to report earnings on Wednesday.
Read more: Billionaire Drahi Cornered by Debt Mountain, Corruption Scandal
--With assistance from Luca Casiraghi.
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