This is the first stage of a soap opera that will run until Tuesday afternoon, at least. In the middle of summer, Patrick Drahi came to explain himself to the many investors made worried by Altice International, the entity that brings together the group’s telecom-media activities in Portugal (more than half of sales), in Israel and in the Dominican Republic. Under pressure since the opening last month of an investigation by the Portuguese tax authorities on suspicion of corruption, the word of the Franco-Israeli billionaire was eagerly awaited.
“It was a shock and a great disappointment for me”, hammered Patrick Drahi this Monday from 1 p.m. “If the suspicions of the Portuguese tax authorities turn out to be true, I feel betrayed. This would mean that a small group of individuals hid their actions and profited from some of our acquisitions, to the detriment of the group and my reputation,” he insisted. This is the first time since 2017, the year of the group’s stock market collapse (at the time listed), that the owner and manager of Altice spoke to investors and financial analysts.
Home is burning for Altice, sitting on a mountain of 60 billion euros in debt after years of an aggressive acquisitions strategy. Arrested in Lisbon, the Franco-Portuguese businessman Armando Pereira, right arm of Patrick Drahi, is accused of having enriched himself on the group’s acquisitions by overcharging Altice for services provided by his own companies. None of these sums would have been declared to the Portuguese tax authorities.
“We acted immediately after learning of the opening of an investigation and took action accordingly,” says Patrick Drahi today. For example, Altice has launched an independent audit with leading law firms in each region where its Portuguese subsidiary operates. The group also suspended payments to the sixty or so offending suppliers. Patrick Drahi assured that the scandal would have “no impact” on Altice International’s finances and forecasts.
The businessman tried to give guarantees on the commercial dynamics of his branch. Earlier in the morning, Altice International published higher results for the second quarter of 2023. With revenue up 4.6%, at 1.277 billion euros, gross operating surplus (Ebitda) in growth of 4.3%, to 456 million euros, and operating cash flow of 241 million euros.
The operator’s managers have also specified their objectives for the whole of the 2023 financial year. While they previously targeted “growth in revenues, EBITDA and operating cash flow”, they now anticipate increases in these last two indicators of 7% and 13% respectively, at constant exchange rates. The company is also active in online advertising through its Teads subsidiary.
“The group is able to get out of debt and ensure its next credit maturities”, especially insisted Patrick Drahi. The financial director of Altice International adding that the priority of the group was to “refinance” its credit lines maturing in 2026, in particular through “the sale of assets”. “We are confident that the sale of the datacenters (data center) in Portugal should be finalized in the coming weeks,” the group said.
A new speech by Patrick Drahi to the financial community of Altice France, the parent company of SFR, BFM channels and RMC radio, will take place on Tuesday at 1 p.m. Clarifications should be made in particular by the group around the sale of its data centers in the country. The businessman could also be questioned by analysts on the scenario, still hypothetical, of the sale of the media division of Altice France (BFMTV, RMC, BFM Business…).
In France, the business community is wondering if the billionaire will end up experiencing the same fate as Jean-Charles Naouri, who will soon hand over the keys to his Casino empire to Czech billionaire Daniel Kretinsky.
Patrick Drahi and the company’s directors will organize meetings with investors next September in London and New York. “I built this group with your support. My interests have always been aligned with those of my investors” concluded the Polytechnician, recalling that he had bought “a hundred companies” during his career.