By Mauro Orru 
 

Shares in French telecommunications giant Orange jumped at market open Thursday after the company moved to reinstate its original dividend for 2020, while revenue for the third quarter rose ahead of expectations.

At 0910 GMT, Orange shares were trading 5% higher at EUR9.50.

Orange's board of directors backed the return to a 2020 dividend of 70 European cents a share ($0.82), which it slashed to EUR0.50 earlier in the year as companies reckoned with fallout from the coronavirus pandemic.

Orange also said it would pay an interim dividend of EUR0.40 a share on Dec. 9, marking an increase of EUR0.10 from the amount it announced in July.

"This means that, in the end, cash-in from the dividend over 2020 will only be EUR0.10 lower than expected by investors," said Thomas Coudry, analyst at European investment bank Bryan Garnier.

Nayab Amjad, analyst at U.S. bank Citi, agrees the dividend reinstatement is likely to be taken well.

Third-quarter revenue came in at EUR10.58 billion compared with EUR10.50 billion in the third quarter of 2019, ahead of consensus of EUR10.54 billion.

Revenue growth played out despite continuing falls in roaming and equipment sales due to the coronavirus pandemic, with growth in France, Africa and the Middle East exceeding declines in the other segments, Orange said.

"Beyond co-financing and the direct impact of the crisis, our underlying performance remains solid, thanks to a very strong commercial performance. There has been no fall-off in demand during the health crisis when the quality of connectivity is more essential than ever," Orange Chief Executive Stephane Richard said.

Orange's earnings before interest, taxes, depreciation and amortization after leases, or Ebitdaal, fell slightly to EUR3.58 billion compared with EUR3.60 billion, but is still ahead of consensus of EUR3.57 billion.

The company started using Ebitdaal as a financial indicator in January 2019 to account for the adoption of the IFRS 16 accounting standard.

Orange said it doesn't foresee significant deviations from its 2020 outlook and continues to expect a slight decline in 2020 Ebitdaal of about 1%, including all the effects linked to the coronavirus pandemic.

 

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

 

(END) Dow Jones Newswires

October 29, 2020 05:39 ET (09:39 GMT)

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