FT reports third consecutive quarter of sustained revenue growth; EBITDA up 2.8%

7 May 2008

French telecoms company France Telecom (FT) today reported its third consecutive quarter of sustained revenue growth for the three months ended 31 March 2008, with revenue up 1.4% to EUR13.03 billion (USD20.10 billion) in the first quarter, versus EUR12.84 billion in Q1 2007. On a comparable basis, revenues were up 3.7% it said. Sales from mobile services rose 1.9% y-o-y to EUR7.06 billion, residential fixed line revenues improved 1.3% to EUR5.65 billion and enterprise services edged up 0.6% to EUR1.9 billion. The company also reported a 2.8% rise in underlying first-quarter profit, in line with market expectations, aided by an improved performance from its western European operations. FT said earnings before interest, tax, depreciation and amortisation (EBITDA) reached EUR4.79 billion in the three months to 31 March 2008, compared with EUR4.66 billion in the same period a year ago. The company’s performance compared favourably with analyst expectations of EUR4.72 billion in a poll compiled by Reuters Estimates. The group confirmed it was interested in acquiring the Nordic operator TeliaSonera, but said there were no negotiations as yet. It also confirmed its full-year financial targets and said sales from its fixed line operations in France would remain ‘quasi-stable’ in 2008.

Commenting on the first quarter 2008 results, the telco’s chairman and CEO Didier Lombard, said: ‘Our first quarter results … confirm the effectiveness of our growth strategy and the ongoing efforts of our employees to transform the Group. This is indeed our third consecutive quarter of strong growth. Revenues increased across all our business segments and geographic areas, driven particularly by a return to growth in the mature markets of Western Europe, including France … An improvement in our operating profitability, which has now been stable for four consecutive quarters, has gone hand-in-hand with the increase in revenues. The Group is thus in a position to confirm with confidence our financial objectives for 2008.’

France Telecom said it controlled 11.9 million mobile subscribers at the end of March 2008, thanks to a net gain of 14.3 million customers (+14.6%) over the year. In the same period, the number of people signed up to mobile broadband services more than doubled to 14.8 million, of whom 8.2 million were in its home market – a net gain of 900,000 users from 1Q07. FT said it had twelve million ADSL lines in Europe by the start of April this year, up 17.8%, or 1.8 million lines, on the same time in 2007, while VoIP and IPTV customers increased by 76% and 83% respectively to 5.4 million and 1.41 million users. FT’s Q1 2008 CAPEX was up 21.1% year-on-year at EUR1.49 billion, equivalent to 11.5% of revenue, and broadly in line with its goal of keeping capital expenditure at roughly 13% of revenues in 2008.

France, Orange Group