France's Iliad considers mobile towers sale to ease cash crunch
* Several funds sounded out on asset disposal -CEO
* Heavy promotions hit revenues in France
* Cuts cash flow target for 2020
* Sees return to growth first-half of 2019
(Recasts story, adds details, background)
By Mathieu Rosemain and Gwénaëlle Barzic
PARIS, March 19 (Reuters) - French telecoms operator Iliad
is sounding out funds to buy part of its mobile towers
business as it seeks to raise cash after heavy promotions hit
its sales in 2018.
Iliad burned through 1.44 billion euros ($1.6 billion) in
cash in 2018, twice as much as in 2017, and has lost half of its
market value over the last year.
Shares in the firm, controlled by billionaire Xavier Niel,
were down by 1.1 percent at 1015 GMT on Tuesday, as analysts
focused on a cut to its 2020 cash flow target.
Iliad aims to generate cash flow of more than 800 million
euros next year and around 1 billion euros in 2021. It had
previously aimed for around 1 billion euros in 2020.
The group has shaken up the French mobile market since 2012
with low-cost services, but is now facing aggressive fixed and
mobile discounts from French rivals Altice Europe's SFR
, Bouygues Telecom and Orange.
It lost about 250,000 mobile subscribers and 93,000
broadband clients in France in 2018, while at the same time
investing hundreds of millions of euros in Italy, where it is
building a mobile infrastructure from scratch.
Despite the challenging environment, Iliad said it had
increased its core operating profit margin in France to 37.9
percent in 2018, from 36.6 percent a year earlier.
But with high spending expected for the deployment of the
next generation of mobile technology, Iliad mentioned a possible
partnership with "an investment fund" for its mobile
infrastructure, without elaborating further.
"No decision has been taken yet," Chief Executive Officer
Thomas Reynaud said in reference to the possible asset disposal.
Altice and Bouygues Telecom both sold part of their networks
to fuel investments in high speed mobile and fixed technology.
"We are confident that we're at the start of a growth
cycle," Reynaud said, insisting that the subscription losses
were concentrated on entry-level offers.
The group's new high end set-up box with luxury audio
speakers and embedded video applications, seduced about 100,000
clients in two months. The impact of the sales has not yet
materialized in the company's accounts.
Iliad, which is due to hold an investor day in mid-April,
said consolidated revenues in France were down by 1.9 percent to
4.77 billion euros.
($1 = 0.8807 euros)
(Reporting by Mathieu Rosemain and Gwenaelle Barzic;
Editing by Sudip Kar-Gupta and Alexander Smith)
First Published: 2019-03-19 08:59:16
Updated 2019-03-19 12:17:52
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