S&P turns VTR outlook to negative

S&P said it changed its outlook for VTR Finance NV to negative from stable and affirmed its B+ issuer and its B senior note ratings. The agency also affirmed the B+ rating on VTR Comunicaciones SpA's senior secured bonds.

“VTR's revenues declined 7% mostly because of the carryover effect from loss of subscribers in 2020 and lower average revenue per user (ARPUs) to defend customer base amid intense competition. As of March 2022, S&P Global Ratings-adjusted EBITDA margin declined to 29% for the last 12 months. The company increased commercial and promotional efforts to regain higher-end customers lost during the pandemic and to moderate churn. This took a toll on ARPUs, which coupled with increased network costs, hit margins,” the agency said in a press release.

S&P said it forecasts weaker EBITDA to drive up S&P Global Ratings-adjusted leverage to about 7.5x in 2022 and 7x in 2023 and warned it could lower VTR’s ratings in the next six to 12 months.

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