Atento, a former Telefónica subsidiary in call centers and business services, is suffering from the stock market. The shares, which hit a record low of $1.70 last week, are down 63% since January and 93% from last year. The company, which Telefónica sold in 2012 for around 1,000 million euros to Bain Capital, has a capitalization of 26 million dollars (about 24 million euros).
The company did not react in the stock market to a recent injection of funds of $40 million from Kyma Capital, MCI and other investors, to improve liquidity and meet upcoming debt payments. In this shock, at the end of 2022, Atento named a new president, Anil Bhalla, and a new CEO, Dimitrios Oliveira, its former general manager in South America.
Industry sources indicate that companies in this sector are affected by the impact of new AI technologies, which reduces the need to outsource service-based business processes (CRM) to people. Atento was punished on her accounts. In addition, Atento, which generates most of its revenue in Latin America, faces long-term debt of $649 million, with a leverage ratio of 6.1 times EBITDA, while revenue is generated in local currencies.
And in the first nine months of 2022, the company reduced its revenues by 2.3%, with losses of 81.5 million, compared to 46 million in the same period of the previous year. Ebitda shares fell 27%, margin 9.5%, down 3.1 percentage points. In the third quarter, revenue fell 0.4%, after lower-than-expected volumes due to the worsening economy in Brazil and Telefónica’s local cost-cutting program.
The company says it continues to execute on its business plan and remains focused on its more than 400 world-class customers in 16 countries and delivering on its mission to deliver an exceptional customer service experience through a combination of innovation, advanced technology and people. play. He indicated that he ended 2022 with a cash balance of $84 million.
Last week, Atento indicated that it had reorganized its offer of products and services to improve the customer experience and identify new technological trends. In addition, it will strengthen its consulting area.
Atento is under pressure from Moody’s, which downgraded the company’s rating from B2 to Caa1 a few days ago, suggesting the downgrade reflected its weak liquidity situation to offset interest rate costs due to the company’s exposure to Brazil. “The expectation of interest rates in 2023 will lead to higher financing costs,” said the agency, which had already downgraded the rating from Ba3 to B2 in November.
Regarding Attento’s capital, sources close to the company confirm that the group’s free float is very small and that three large shareholders have a majority position. According to the Bloomberg ranking, HPS has 24.62%; GCI 21.21%, Farallon 14.43%. Aquiline Capital followed with 9.22%. Spain’s Santa Lucia Seguros, with 5.82%; and Kima at 5.44%.
Contracts with Telefónica
Atento’s revenue from Telefónica, its main customer, which contributes over a third of the business, increased by 1.7% in the third quarter of 2022, due to improvements of 11.9% and 7.6% in America and Europe. 13.6%.
One of the questions Moody’s considered in November centered on the service contract between Atento and Telefónica in Spain and Brazil, which expires in 2023. Sources close to Atento indicate that most contracts are being signed in both markets until 2024 and 2025 and even some until 2026 Other industry sources indicate, on the contrary, that the contract for Spain and Brazil is valid until the end of 2023. These sources say that there is still a long year to go and that it is being renegotiated closer to the end of the term of the contract.