Orange trims 2014 dividend to brace for tough year
PARIS, March 6
PARIS, March 6 (Reuters) - France's largest telecom operator Orange is to cut its dividend for this year by 25 percent to 0.60 euros per share to help it face continued pressure in its home market where sales and profits fell again last year.
Low-cost entrant Iliad has helped turn France, where Orange earns half its revenue, from one of Europe's most profitable telecom markets to one of its cheapest for consumers in the past three years.
Even as it added mobile contract customers and rolled out superfast 4G services, Orange's sales in France fell 6.6 percent to 20.02 billion euros last year, while French core profit fell almost 8 percent to 7.13 billion.
Nevertheless, Orange achieved its main target for 2013 - to achieve 7 billion euros in operating cash flow. It was helped by an aggressive cost-cutting effort on everything from software to employees that found 929 million euros in savings last year.
Group sales in 2013 fell 4.5 percent to 40.98 billion euros last year, while earnings before interest, tax, debt, and amortisation (EBITDA) declined 7.5 percent to 12.65 billion euros. Net income nearly doubled to 2.13 billion euros because of fewer impairment charges.
Analysts had predicted 2013 sales of 41.2 billion euros, EBITDA of 12.65 billion, and net income of 2.69 billion, according to Thomson Reuters I/B/E/S.
For its 2014 outlook, Orange pledged to stabilise its EBITDA margin around its 2013 level of 30.9 percent.
"Despite persistent pressure on revenues, Orange expects that the restated EBITDA for 2014 will be between 12.1 and 12.6 billion euros," it said in a statement.
Orange finance chief Gervais Pellissier said he no longer wanted to predict when things would start to improve in the French market.
"Everything that is happening today in France around the possible consolidation of companies in the sector shows that we may be approaching the bottom," he said, referring to the ongoing auction for Vivendi's SFR business.
Trending On Reuters
Strategies for making the most of your donations - from how to grow the money you plan to give to how to withdraw it with minimal tax implications. Video