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Orange Q2 core operating profit up 0.5%

Orange SA, France’s biggest telecom firm, said on Thursday second-quarter core operating profit rose 0.5% from a year earlier, as strong growth from its Africa and Middle East division offset a fall in sales in its home country and Spain.

The group has struggled to revive its stock valuation and renew growth in its two biggest markets, France and Spain, as it faces high investment needs to deploy fixed and broadband networks on top of heavy competition in the two countries.

Earnings before interest, taxes, depreciation and amortisation after leases (EBITDAaL) rose to 3.31 billion euros ($3.38 billion) over the period. This matched analysts’ estimates compiled by the company.

Second-quarter sales fell 0.4% on a comparable basis to 10.7 billion euros. Orange also confirmed its full-year targets, including an increase in core operating profit between 2.5% and 3.0%.

It said it would offer a dividend of 70 euro cents per share for the 2022 fiscal year, in line with its expectations.

Orange has attempted to add new streams of revenue by developing a new online bank, whose costly development has still to bear fruits.

It has also carved out its mobile towers in Spain and France into a separate entity, TOTEM, with the hope to capitalise on investor interest in telecom infrastructure.

Orange’s Spanish market in particular has weighed on the company’s profit lately. The telecom operator expects to see its division’s earnings grow again from next year, which may be further helped by a $19 billion tie-up of its operations with MasMovil.

Orange Chief Financial Officer Ramon Fernandez told reporters in a call that the group had asked French telecom regulator Arcep the permission to extend its profitable roaming contract with its rival Iliad over 2G and 3G mobile networks.

Fernandez declined to disclose the proceeds from this contract. Christel Heydemann, who took over as CEO in early April, will present the group’s next mid-term targets and strategy in February 2023, the finance chief added. Reuters

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