Orange posts flat earnings after cost cuts, price hikes
Reuters
Published Oct 24, 2023 06:34
Updated Oct 24, 2023 10:15
By Diana Mandia
(Reuters) -France's biggest telecoms operator Orange reported flat core operating earnings in the third quarter, as a cost-cutting plan and price increases bolstered its performance in a sluggish market suffering the effects of inflation.
Telecoms groups have been raising prices to offset the impact of inflation and Orange recently reduced the duration of promotions from 12 to six months in France, amid a less dynamic market since the beginning of the year.
Quarterly revenue in Orange's biggest market fell 0.5% to 4.44 billion euros ($4.73 billion) due to a fall in wholesale services, with growth in its retail business preventing a deeper loss, it said on Tuesday.
Revenue in Africa and the Middle East rose more than 12%.
The group said it was focusing on the safety of employees working in the latter region, amid an escalating Israeli-Palestinian conflict. According to Orange, its business in the Middle East is balanced and none of the 18 countries in which it operates accounts for more than 15% of total revenue.
Orange also said it was confident of obtaining approval from the European Commission for a proposed merger of its Spanish unit and peer MasMovil towards year-end, enabling the transaction to close in the first quarter of 2024.
"We are actively discussing," Chief Executive Christel Heydemann said in a call.
The European Commission has stopped the clock on its in-depth investigation, a procedure that can be activated if the parties fail to provide, in a timely way, key information sought of them.
The group also said a voluntary redundancy plan in its enterprise business is the final phase of negotiation. Orange expects about 670 exits in France.
Earnings before interest, tax, depreciation and amortisation after leases (EBITDAaL) rose 1.4% to 3.60 billion euros ($3.84 billion) between July and September, meeting expectations of 3.59 billion from a company-compiled poll.
The shares were up 0.7% at 10.838 euros by 0905 GMT after initially dropping as low as 10.54 euros, their lowest since early September.
($1 = 0.9393 euros)
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Written By: Reuters
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