March 24, 2020 / 5:34 PM / 17 days ago

UPDATE 1-Altice Europe turnaround picked up pace before coronavirus crisis

* Q4 core profits rose 14%, beating expectations

* Altice France’s sales growth accelerated

* SFR plans to tap France’s unemployment scheme - sources (Adds details, background, Drahi quote)

By Mathieu Rosemain

PARIS, March 24 (Reuters) - Telecoms and cable group Altice Europe beat quarterly earnings forecasts on Tuesday, showing its turnaround plan was bearing fruit before the economic downturn unleashed by the coronavirus pandemic.

Two union officials told Reuters earlier on Tuesday that the group’s French division, SFR, planned to tap a government support scheme for up to 60% of its workforce due to the health crisis that has put France into lockdown.

The fourth-quarter results, which cover a period before the virus outbreak, showed SFR continuing to add subscribers in both its fixed and mobile businesses.

That suggested the debt-laden group’s turnaround plan started about two years ago - including asset sales and heavy cost cutting - was yielding benefits in the French market, one of the most competitive in Europe.

SFR added 44,000 broadband customers in the fourth quarter, while the number of its mobile contracts grew by 196,000.

“In Altice France, our strong fourth-quarter results were supported by growth across all segments, including residential revenue growth year over year for the third successive quarter which is now significantly accelerating in the first months of 2020,” founder Patrick Drahi said in a statement.

Amsterdam-based Altice Europe said group core operating profits grew by about 14% in the quarter on a constant currency and yearly basis to 1.45 billion euros ($1.6 billion)

Group revenues rose 11% to 4 billion euros in the last three months of 2019, beating an average of analysts’ expectations compiled by the company.

Altice Europe said it expected to grow revenue and profits further in 2020. It also expects to reduce its debt burden by reaching a debt-to-earnings ratio for its telecoms activities of 4 to 4.5 times.

$1 = 0.9267 euros Reporting by Mathieu Rosemain, Editing by Benoit Van Overstraeten and Mark Potter

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