February 16, 2016 / 7:10 AM / 3 years ago

Orange forecasts return to core profit growth, pursues Bouygues talks

The Orange telephone company logo is seen at their headquarters in Paris, France, January 12, 2016. REUTERS/Charles Platiau

PARIS (Reuters) - France’s biggest telecoms operator, Orange, said labor cost cuts and stable revenue helped it return to core profit growth a year earlier than planned in 2015, and forecast a further rise in 2016.

The telecoms operator added that talks to buy Bouygues Telecom would “require at least several weeks before any decision is taken”, although Chief Executive Stephane Richard said Orange was doing everything to see them through.

Orange said 2015 restated earnings before interest, taxes, debt and amortization (EBITDA) rose 0.1 percent to 12.43 billion euros ($13.86 billion), beating its own target of “at least” 12.3 billion and the average estimate in a Reuters poll of 12.36 billion.

Europe’s fifth-largest telecom operator by market value predicted that its restated EBITDA would be higher again this year on a comparable basis.

Annual revenue dipped 0.1 percent to 40.24 billion euros, compared with the poll average of 40.27 billion. Net income more than doubled to 2.96 billion euros from 1.26 billion. The company said it would pay a dividend of 60 cents per share for 2015 and 2016.

Shares in Orange were up 1.4 percent in early trading.

Orange’s CEO told BFM Business on Tuesday that the possible acquisition of Bouygues Telecom was “a large transaction which requires that we take as much time as necessary”, adding that he was cautious on the outcome.

Paris-based Orange and Bouygues are likely to reach an initial agreement in March at the earliest, amid wrangling over terms that would make Bouygues the second-biggest shareholder in Orange after the French state, sources close to the matter told Reuters on Monday. ($1 = 0,896157 euro)

Editing by James Regan

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