Morningstar | We Are Concerned With Iliad’s Delayed Reporting of 2018 Results; No FVE Change Yet
Iliad continues to delay reporting its 2018 results. The firm struggled to grow its wireless customer base in France during the first three quarters of the year and has been upstaged by the success of Orange and especially Bouygues, which grew its wireless subscriber base 13.6% during 2018 to 16.4 million. Iliad’s wireless base increased only 1.1% year over year in the third quarter, and it actually lost subscribers during the second and third quarters.In our experience, delayed results are often an ominous sign of problems. While we are not going to reduce our EUR 143 per share fair value estimate or narrow moat rating yet, we are concerned with the delay. Our uncertainty rating, already at very high, reflects our concerns regarding the firm’s small scale in France and risky entry into the Italian wireless market. The reporting delay adds yet another layer of uncertainty, and we would suggest investors be very careful about initiating or adding to a position in Iliad until the firm has reported 2018 results.
Iliad is an operator in the French internet access & telecommunications markets. Co. divides its operations into three business segments: Broadband, Traditional Telephony, and Retail Telecom. Broadband includes Internet service provider operations, hosting services, user assistance operations & operations related to the rollout of the FTTH (fiber-to-the-home) network. Traditional Telephony includes switched landline telephony (One.Tel and Iliad Telecom), directory services (mainly the ANNU reverse look-up directory accessible by Minitel, telephone, Internet and SMS text messaging) and e-commerce operations (Assunet.com). Retail Telecom offers various mobile phones & services to customers.
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