PARIS Altice (ATCA.AS), the fourth-biggest cable operator in the United States, reported a 16 percent jump in quarterly core operating profit on Wednesday but gave no update on whether it might list its U.S. business.
The group's founder, Franco-Israeli tycoon Patrick Drahi, has expanded through a rapid series of debt-fuelled acquisitions in the United States and Europe that has left it with total net debt of 50.4 billion euros ($53 bln) at the end of 2016, or about twice its annual revenues.
The group's operating free cash flow, however, jumped 20.4 percent to 968 million euros in the fourth quarter, potentially giving it room to pay down some of that debt.
Altice's French telecoms business, SFR Group (SFRGR.PA), meanwhile saw its first quarterly rise in revenue in about six years, although Altice's Chief Executive Michel Combes said the French telecoms market remained competitive.
Altice's total group adjusted earnings before interest, tax, debt and amortisation (EBITDA) rose to 2.29 billion euros in the three months through December, slightly missing a Reuters poll of 2.35 billion euros.
Its U.S. businesses, put together under business unit Altice USA, drove the group's quarterly profit growth.
Altice USA was formed from the cable operators Suddenlink Communications and Cablevision Systems Corporation, which Netherlands-based Altice bought in 2015 and 2016 respectively.
Altice noted in its results statement that it was considering an initial public offering of a minority interest in its U.S. unit but also said it would not necessarily go ahead. Altice USA chief Dexter Goei declined to comment when asked on a conference call, although he said the U.S. outlook was good.
"The U.S. financial markets have been robust pre and post-Trump," Goei said on the call, referring to the election of President Donald Trump last year.
"There is a cautious optimism amongst the market here with some of the financial reforms he's looking to implement", he said.
A listing would help Drahi expand his budding U.S. cable empire by giving its subsidiary public stock that could be used as currency to finance more acquisitions.
Sources familiar with the matter told Reuters in October that Altice USA might hire underwriters for the listing by January and could go public sometime in 2017, depending on market conditions.
Altice USA's performance contrasts with Altice's operations in France, where SFR Group (SFRGR.PA) is the second-biggest telecoms operator but has faced severe competition.
The arrival of Iliad's (ILD.PA) low-cost Free mobile services in 2012 triggered a protracted price war whose effects are still being felt by SFR and rivals Orange (ORAN.PA) and Bouygues Telecom (BOUY.PA).
SFR said fourth-quarter revenue increased by about 0.6 percent to 2.89 billion euros.
That growth, however, was not sufficient to offset a 2.9 percent drop in full-year revenue, with core operating profits down 1 percent.
Altice said the group sees "revenue stabilisation in France" in 2017.
(Reporting by Mathieu Rosemain; Editing by Leigh Thomas and Susan Fenton)