Orange sticks to guidance as price hikes keep earnings in line
Reuters
Published Apr 26, 2023 06:37
Updated Apr 26, 2023 08:45
By Anna Pruchnicka
(Reuters) -France's biggest telecoms operator Orange confirmed its guidance on Wednesday after it posted first-quarter core operating earnings in line with expectations, driven by growth in Africa and the Middle East and higher prices.
The company, which has been raising its prices across Europe to reduce the impact of inflation on its results, said core earnings (EBITDAaL) rose 0.5% on a comparable basis to 2.59 billion euros ($2.84 billion). That matched the 2.59 billion euros expected by analysts in a company-compiled poll.
Its shares opened slightly lower before recovering to rise 1.2% by 0736 GMT, outperforming the wider index.
Revenues in Orange's biggest market France slipped by 1.8%, but it said it expected the top line to benefit from price hikes that will be fully effective in the second quarter.
The rises had a "limited increase in the mobile churn rate," Orange said, adding that churn reached 12.0%, up 0.8 percentage points from the previous year.
Jean-Michel Thibaud, acting group CFO, said he was not worried.
"We have a focus on value this year, the commercial performance is perfectly in line with our expectations in terms of volume," he said in a media call.
Orange operates in 26 countries. Aside from Africa and Middle East, which jumped 9.1%, revenue in Spain, Orange's second biggest market, rose 2.8%, marking the third consecutive quarter of gains.
Orange plans to combine its Spanish operations with MasMovil in an 18.6-billion-euro deal.
It also has a turnaround plan for its enterprise business, which offers voice, data and IT consulting services. As part of this, Orange said it has started talks with trade unions on about 670 voluntary departures in France.
Orange confirmed its guidance for organic cash flow from telecom activities of at least 3.5 billion euros and slight growth in EBITDAaL (earnings before interest, tax, depreciation and amortisation after leases) this year.
($1 = 0.9110 euros)
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Written By: Reuters
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