Orange Profit Up as International Sales Grow
October 25 2016 - 4:40AM
Dow Jones News
PARIS—Orange SA's sales growth picked up in the third quarter as
mobile services revenue increased in Spain and the Middle East but
intense competition in its home market of France weighed on
results.
Sales rose 0.4% to €10.32 billion ($11.23 billion) in the three
months to Sept. 30, France's biggest phone carrier said Tuesday.
That helped push up third-quarter earnings before interest, taxes,
depreciation and amortization, or Ebitda, by 1% to €3.6 billion,
slightly above analysts' expectations of €3.58 billion.
Having failed to buy Bouygues Telecom in April, Orange is now
stuck competing with three rivals in the French market where a 4G
mobile phone plan is available for less than €20 a month. Orange is
betting it can beat out rivals by focusing on the quality of its
network and services rather than lowering prices. It is also
expanding in the Middle East and Africa.
Orange's revenue in France fell 0.5% to €4.77 billion in the
three months, hit by declining sales from mobile services. In its
domestic market, the company added 134,000 domestic fixed broadband
customers in the quarter and 187,000 net new mobile contracts.
Raymond James analyst Stephane Beyazian said fixed line growth
in France almost offset the decline in mobile revenue, "hence it is
reassuring that competition in French mobile is not as intense as
feared lately," he said.
Revenue rose 7.8% in Spain and 2.5% in the Middle East on a
comparable basis. Sales continued to be pressured by the European
Union's push to cut roaming charges in the region ahead of plans to
abolish them altogether.
That change should result in a €150 million to €170 million hit
to revenue in 2017, Orange chief financial officer Ramon Fernandez
told analysts.
Orange shares rose 3.6% to €14.60 in early trading in Paris.
Orange confirmed its full-year target of posting higher Ebitda
in 2016 than in 2015 on a comparable basis. It also said it plans
to propose a dividend of €0.60 a share.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
October 25, 2016 04:25 ET (08:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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