FT revenue up in H1 but profit drops on UK sale

28 Jul 2011

France Telecom (FT) said consolidated first-half revenues climbed by 0.3% year-on-year to EUR22.57 billion (USD32.6 billion), excluding the impact of regulatory measures, although net income slumped to EUR1.95 billion from EUR3.70 billion in the first half of 2010 – attributed in part to the setting up of UK-based joint venture Everything Everywhere in April. Excluding the impact of that change, FT said net profits would have fallen by just over EUR600 million. The Paris-based telco said mobile services performed well in France (6.2%) and Spain (7.3%), and emerging markets grew rapidly, rising 7.8% year-on-year. FT recorded a 7.0% increase in overall customer numbers on a comparable basis, led by a 23% rise in mobile services in Africa and the Middle East, with total group customers reaching 217.3 million at 30 June 2011. The operator booked restated EBITDA of EUR7.61 billion and said margin erosion was limited to -1.5 percentage points, of which -0.6 points was due to the crises in Egypt and Cote d’Ivoire and the unfavourable impact of the VAT increase in France, which was only partially passed on to end users. CAPEX was equal to 10.9% of revenues, representing EUR2.47 billion in investments, an increase on the first half of 2010.

Commenting on the first-half 2011 results, FT chairman and CEO Stephane Richard said: ‘These solid first-half results reinforce our strategic plan announced last May. They demonstrate our ability to adapt to difficult market conditions and give us confidence in the future. In addition to our continued growth in Spain, we succeeded in maintaining a good performance in France, a market where we are preparing for the arrival of a fourth mobile operator while continuing our investment in very high-speed broadband. In Africa, we had to address particularly challenging political conditions in the first half, principally in Cote d’Ivoire and Egypt, however these conditions are expected to ease during the second half of the year. As previously announced, we have reviewed our European operations and are launching today the sale process of our consumer business in Switzerland.’

France, Orange Group