France Telecom to lower dividend in 2012, 2013

Nieuws Algemeen Frankrijk 25 OCT 2012
France Telecom to lower dividend in 2012, 2013
France Telecom-Orange has warned of further pressure on cash flow next year and cut its dividend for 2012 and 2013. The operator said it sees an operating environment more difficult than initially expected in 2013, due to the difficult macro-economic outlook, strong competition in the French mobile market and continued regulatory pressure. 

While annual operating cash flow is expected to remain over EUR 7 billion, the company targets a reduction in the net debt-to-EBITDA ratio to around 2 by the end of 2014. With cash needed to invest, such as the EUR 2 billion planned for FTTH in France, the dividend will be lowered to at least EUR 0.80 per share in 2012 and 2013, from EUR 1.40 in 2011. Ongoing cost cuts, further changes in the commercial offer and improved operations should help the company return to growth in cash flow in 2014. Acquisitions will be limited to consolidation in existing markets and strengthening innovation. 

The new outlook came alongside third-quarter results showing revenues down 4.7 percent from a year earlier to EUR 10.76 billion. This was led by a 6.6 percent drop in Poland, 5.2 percent fall in France, Spain down 1.1 percent, the rest of the world off 7.9 percent and the enterprise division down 0.4 percent. Adjusted EBITDA fell 8.8 percent to EUR 3.65 billion, and the margin declined to 33.9 percent from 35.4 a year ago. 

Capex for the first nine months of the year was little changed at EUR 3.70 billion or 11.4 percent of sales, while operating cash flow over the same period fell 11.8 percent to EUR 6.95 billion. Orange maintained its target for cash flow of close to EUR 8 billion this year. 

Growth in mobile customers improved to 3.1 million net additions in Q3, led by 2.5 million new customers in Africa and the Middle East and 317,000 in France. The total mobile customer base numbered 168.8 million at end-September, while fixed broadband customers increased by 121,000 in Q3 to a total 14.8 million. 

Categories:

Algemeen

Companies:

Orange,  France Telecom

Regions:

Afrika,  Europa

Countries:

Frankrijk

Tags:

Voice services, Data services, Financial figures, Internet Access

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