Orange reported second-quarter revenues up 1.0 percent from a year earlier to EUR 9.885 billion, helped by a recovery in the business market and improving trends in mobile revenues in its main markets France and Spain. On a comparable basis, adjusted for acquisitions and currency effects, revenues fell 0.2 percent, slowing from a 0.9 percent decline in the first quarter. The Enterprise business slowed to a 0.5 percent decline on a comparable basis, France was down 0.8 percent and Spanish revenues fell 2.5 percent. The main growth area remained Africa and the Middle East, where revenues increased 4.5 percent.
Adjusted EBITDA rose 1.1 percent year-on-year to EUR 3.290 billion, helped by the stronger dollar and lower indirect costs, especially a lower headcount. On a comparable basis, EBITDA fell 0.4 percent from a year ago, and the margin was stable at 33.3 percent. Orange maintained its outlook for full-year EBITDA of EUR 11.9-12.1 billion, after a slightly lower result of EUR 5.807 billion in the first half of 2015. The forecast does not include the planned acquisitions of Jazztel and Meditel.
The company also reported a strong improvement in net profit over the first half, to EUR 1.283 billion from EUR 728 million a year ago thanks to a better contribution from EE in the UK. Capital expenditure over the six months increased 6.8 percent to EUR 2.672 billion, going mainly to fibre and 4G expansion.
Orange finished the quarter with 189.8 million mobile customers, an increase of 6.9 percent year-on-year. In Africa and the Middle East, the mobile base rose by 11.3 million in the past year to 102 million customers. The company also counted 14.2 million Orange Money customers, up 37 percent from a year ago. Fixed broadband subscribers reached 16.2 million at the end of June, an increase of 3.2 percent year-on-year, including 323,000 new customers in France and 211,000 in Spain. The total included 966,000 fibre subscribers.
Net debt was up slightly from the end of 2014 and is set to expand further in the second half with the completion of the Jazztel takeover. Orange said it expects net debt to reach around 2.2 times adjusted EBITDA at year-end, versus 2.13 at the end of June, and the group will continue to pursue a policy of selective acquisitions, focusing on markets where it is already present. Over the medium term, net debt should fall to 2x EBITDA, helped by the sale of the stake in EE. Orange proposed an interim dividend of 20 cents a share, in line with a stable dividend of 60 cents per share over the full year.
