France Telecom reported first-half revenues of EUR 22.57 billion, up 1.9 percent from a year earlier thanks to takeovers. On a comparable basis, revenues fell 1.3 percent, hurt by regulatory effects. Comparable sales were down 2.3 percent in its home market France, 4.3 percent in Poland and 1.6 percent in Enterprise services, but improved 4.1 percent in Spain. The company said it was also hurt by difficult market conditions in Africa, especially Egypt and Cote d'Ivoire, and the increase in VAT on TV services in France. The operator's adjusted EBITDA fell 2.2 percent to EUR 7.61 billion, and net profit slid to EUR 1.95 billion from EUR 3.73 billion a year ago. The net result was also hurt by higher tax and the spin-off of the UK operations into the Everything Everywhere joint venture. Capex increased 16.8 percent to EUR 2.47 billion, led by spending on FTTH in France, submarine cables and mobile network upgrades. Operating cash flow dropped 9.2 percent to EUR 5.14 billion. The group had 217.3 million customers at the end of June (excluding MVNOs), a 7.0 percent increase year-on-year on a comparable basis. The growth was led by 14.1 million net additions in the Orange mobile business in the past year, mainly in Africa and the Middle East, for a total 158.4 million. The broadband base grew by 5 percent to 14.0 million, and TV subscribers were up 27 percent to 977,000. France Telecom said it was on track to meet its target for full-year cash flow of EUR 9 billion. It announced an interim dividend of EUR 0.60 per share, and maintained the full-year target at EUR 1.40. It also announced the outcome of its recent strategic review of the European operations and said it has started the sale process for its consumer business in Switzerland. It's still reviewing the Africa, Middle East and Enterprise activities and expects to complete the process by year-end.
