Bouygues reports 41% drop in FY12 net profits, as telecoms arm weighs heavy

27 Feb 2013

French construction-to-telecoms conglomerate Bouygues says its group net profit for FY2012 fell by 41% to EUR633 million (USD829 million) as its telecoms unit – Bouygues Telecom – weighed heavily on its bottom line as a result of intense competition from rival Free (Iliad) which launched a low-cost mobile operation at the start of last year. Although group revenues climbed 3% year-on-year to EUR33.5 billion, Bouygues said that turnover from telecoms fell sharply to EUR4.36 billion from EUR5.23 billion in 2011. Bouygues expects overall revenue in 2013 will fall to EUR33.45 billion, but warns that revenue from its telecom unit is expected to drop again.

On a more positive note, the group did note solid growth in Bouygues Telecom’s fixed broadband subscriber base, with the addition of 605,000 new subscribers, and the ‘stabilisation’ of the subscriber base in the mobile segment at 11.3 million. In FY2012, Bouygues Telecom fixed broadband sales rose 51% on 2011 to EUR627 million. However, its overall results fell sharply following ‘upheaval on the French mobile market’, but were nonetheless in line with expectations. EBITDA was on target at EUR908 million. Full-year operating profit amounted to EUR122 million and reflected the fall in EBITDA and higher amortisation expense and provisions. Operating profit stood at EUR4 million and included non-current charges of EUR152 million in connection with the adaptation plan and capital gains on asset disposals of EUR34 million. 2012 ended with a loss of EUR16 million. Going forward, Bouygues hopes it has created a sound financial structure for the operator, with robust free cash flow and tight control of net debt despite the purchase of 4G frequencies.

France, Bouygues Telecom