Orange, France’s number one telecoms group, contained the financial damages stemming from the COVID crisis in the second quarter thanks to unexpected higher domestic sales, which helped offset a steep downturn in Spain.
The company’s overall second-quarter sales dropped 0.4% to 10.4 billion euros, while core operating profits over the period were down by 1.8% as COVID-triggered lockdowns in Europe drove costs higher and led to a loss in lucrative roaming fees.
The company cut its forecast for core profit for the year, now expecting a drop of about 1%. It previously expected it to be “flat positive”.
The telecoms industry has weathered the economic impact of the virus better than other sectors as people relied on their communications infrastructure to work from home during lockdowns as well as play video games and watch videos online.
“This crisis has revealed the strategic nature of telecoms networks for our economies and even society as whole,” Chief Executive Officer Stéphane Richard said.
The Paris-based group said sales in France, which accounts for more than 40% of its total revenue, grew by 2.7% from a year earlier, significantly beating market expectations for a drop of 1.3%.
That performance was driven by a boost in wholesale revenues, which include money received by other telecoms operators for the deployment of fibre broadband technology in less populated areas in the country.
The group confirmed it expected a full-year organic cash flow of more than 2.3 billion euros for its telecom activities.
Orange, which cut its 2019 dividend by 30%, said it would tell investors about its dividend policy for the current year between the third and fourth quarter results.