France Telecom cuts dividend after drop in FY results

Nieuws Algemeen Frankrijk 22 FEB 2012
France Telecom cuts dividend after drop in FY results
France Telecom-Orange reported annual revenues down 0.5 percent to EUR 45.48 billion in 2011, as acquisitions helped offset negative currency and regulatory effects. EBITDA fell 3.7 percent to EUR 15.08 billion, and the margin dropped to 33.3 percent from 34.4 in 2010, hurt by the political turmoil in Egypt and Cote d'Ivoire, a VAT increase in France and higher sales costs. The decline came mainly in its home market France and Poland, while results were up in Spain and most parts of Africa and the Middle East. In the fourth quarter, revenues fell 2.6 percent to EUR 11.43 billion, and EBITDA dropped 3.9 percent to EUR 3.47 billion. 

Net profit over the full year fell to EUR 3.90 billion from EUR 4.88 billion in 2010, hurt by the spin-off of the UK operations and over EUR 400 million in impairment charges for operations in Egypt, Romania, Armenia, parts of East Africa and the stake in Portugal's Sonaecom. Annual operating cash flow was down 9.2 percent to EUR 9.31 billion but in line with the outlook for at least EUR 9 billion. Capex increased 4.5 percent to EUR 5.77 billion. The company announced a change in dividend policy in order to conserve cash and maintain a net debt ratio of about 2 times EBITDA. Operating cash flow this year is expected to drop below EUR 8 billion, and dividends in 2012 and 2013 will fall to 40-50 percent of cash flow.  For 2011, the dividend was unchanged at EUR 1.40 per share. The operator said it will continue its focus on cost control and the 'adapt to conquer' strategy plan to 2015. In 2012, it expects to face higher tax, more intensive competitive pressures and a difficult economic environment. 

France Telecom finished the year with 226.3 million customers, up 8.0 percent from 2010 due mainly to growth in mobile services in Africa and the Middle East. The mobile base grew by 17 million over the year to a total 167.4 million. That includes 74.6 million in Africa and the Middle East, up 24.6 percent. The company said its Orange Money service is now marketed in eight African countries and had 3.2 million customers at the end of 2011. In Europe, customers with smartphones increased 57 percent last year to 16.2 million. In fixed broadband services, the company grew by 5.0 percent last year to 14.4 million subscribers, including net additions of 391,000 in France, 230,000 in the other European countries and 70,000 in Africa and the Middle East. Digital TV (IPTV and satellite) grew by 24.8 percent in Europe, to reach 5.14 million subscribers at the end of 2011, and the digital music service Deezer ended the year with 1.2 million customers. 

Categories:

Algemeen

Companies:

Orange,  France Telecom,  Deezer,  Sonaecom

Regions:

Afrika,  Europa

Countries:

Frankrijk

Tags:

Voice services, Financial figures, Internet Access

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