ORAN Orange

PARIS—Altice NV said profit rose in the second quarter helped by recent acquisitions in the U.S. which offset a slowdown in France where the cable and mobile-phone operator continued to lose subscribers amid competition from rivals.

The acquisitive multimedia company, founded by billionaire entrepreneur Patrick Drahi, reported a 2.7% rise in adjusted earnings before interest, taxes, depreciation and amortization to €2.27 billion ($2.52 billion) in the three months to end-June from the same period a year earlier on a 2.6% drop in revenue to €5.83 billion. Altice didn't report a figure for net profit.

Altice, which owns French cable and telephone operator SFR SA, said trading conditions were difficult in its main market though it stuck to existing profit forecasts for the full year.

Competition has heated up again in France after the latest attempt to reduce the number of big players to three from four collapsed when former monopoly Orange SA was unable to agree on a takeover of the telecom assets of construction conglomerate Bouygues SA.

"It has been another commercially challenging quarter for SFR in France but we are confident the revenue and adjusted Ebidta trends will continue to improve," said Altice's Chief Executive Michel Combes.

The results highlight the delicate balancing act that Mr. Drahi is having to perform between sharply reducing costs in his companies and reinvesting in their products to grow revenues.

Mr. Drahi has reached an agreement with two key unions to cut 5,000 jobs, or about a third of the workforce, at SFR by mid-2019. At the same time, Mr. Drahi has invested in networks while building a media and content portfolio that includes the rights to English Premier League soccer matches to entice new customers.

Adjusted Ebitda at SFR fell 6.8% to €999 million in the quarter as the company grappled with falling subscriber numbers. Revenue declined 4.3% to €2.78 billion.

On Tuesday, Altice reiterated that it expects revenue in France to fall less sharply in 2016 than the year prior.

In the U.S., the company's recently acquired Suddenlink Communications posted a 16% increase in adjusted Ebidta to €258 million in the second quarter, its second full quarter under Altice control. Suddenlink's revenue rose 3% to €566 million.

At Cablevision, Altice's latest acquisition, adjusted Ebitda rose 8.7% in the quarter to €471 million while revenue fell 1% to €1.43 billion. Altice merged Cablevision with Suddenlink in June to form ' Altice USA'. Altice's Portuguese unit reported a 23% rise in adjusted Ebidta.

Altice, which has said its strategic focus this year is on integrating and improving returns at its expanded business in Europe and the U.S., is in talks with potential buyers to sell its Belgium unit, according to Altice's President Dexter Goei.

Write to Inti Landauro at inti.landauro@wsj.com and Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

August 09, 2016 03:05 ET (07:05 GMT)

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