FT first-quarter sales, EBITDA in line with forecasts, confirms outlook

29 Apr 2010

Telecoms giant France Telecom (FT) today posted its financial results for the first quarter ended 31 March 2010, reporting lower revenues and earnings before tax, interest, debt and amortisation (EBITDA), but confirming that its financial objectives for 2010 remain intact. The telco said 1Q10 revenues fell 2.7% year-on-year to EUR10.96 billion (USD14.46 billion), compared to a forecast of EUR11.01 billion in a Reuters’ poll, and EBITDA of EUR3.76 billion was down 5.5% y-o-y and below market expectations of EUR3.84 billion; the operating margin was 34.3% – again below industry analysts’ expectations of an EBITDA margin of 34.9%. The operator said its latest performance was a clear demonstration that any early signs of green shoots in the economy had yet to extend to Europe’s telecoms sector. ‘The recovery is clearly not here yet in the enterprise market and in the broader consumer market it is likely to be slow and gradual,’ FT chief financial officer Gervais Pellissier said in a conference call today. FT has trimmed its CAPEX programmes hard, but says that its bottom line is also being impacted by regulatory changes such as lower voice call termination rates and intense competition in its fixed line and broadband markets in France.

Commenting on the 1Q10 results for, FT chief executive Stephane Richard said: ‘The Group again proved its ability to maintain its performance in terms of revenues and profitability against the backdrop of an economic and regulatory environment that remains difficult. France saw a slight improvement in revenues and the resumption of the fibre-optic network deployment in more than 20 cities and towns. In the Africa and the Middle East region, the 7% growth stemmed from the stronger performance of our operations including those is the Ivory Coast, Kenya, Senegal and Uganda. On 5 May, we will launch Orange in Tunisia … With the explosion of data services, the group continues to invest almost 12% of its revenues annually in areas such as its 3G/3G+ mobile networks, the restarting of the fibre rollout and the deployment of new networks in emerging markets … I am therefore able to confirm our objectives for the full year and … by the summer we will present France Telecom’s commitments and action plan for the next five years.’

France, Orange Group