Orange Shares Rise on Reinstated Divided, 3Q Performance
October 29 2020 - 05:54AM
Dow Jones News
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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