Orange posts 5.8% sales drop, but profit jumps

6 Mar 2014

France’s Orange Group has reported its financial results for fourth quarter and full year 2013, with sales for the full year declining 5.8% on a reported basis and 4.5% on a comparable basis to EUR40.98 billion (USD56.27 billion). More than 40% of the revenue decline was related to regulatory measures, the company said, and without this the year-on-year fall would have been 2.6%. In its domestic market sales were down 6.6% on a comparable basis to EUR20.02 billion, primarily due to an 11.5% drop in mobile ARPU which stemmed from an ongoing price war between the country’s four network operators. Its operations in Poland also suffered from competitive pressure on pricing, with sales down 8.6% y-o-y at EUR3.08 billion. There was better news in Spain, where Orange reported a 0.6% increase in turnover to EUR4.05 billion, led by sales of mobile handsets sold under plans with payment by instalment, and by fixed services. The ‘Rest of World’ segment, which includes the Group’s operations across Africa, saw revenues decline 0.5% to EUR7.79 billion.

Restated EBITDA was EUR12.65 billion in 2013, a decrease of 7.5% on a comparable basis. The group said its drive to reduce operating costs saved EUR929 million, and a significantly lower level of goodwill impairment in 2013 meant operating income climbed to EUR5.29 billion, from EUR4.06 billion in 2012, while net income was up 93% at EUR2.13 billion. Net income attributable to Orange shareholders more than doubled to EUR1.87 billion.

Group sales for the fourth quarter fell 5.1% on a comparable basis to EUR10.22 billion, with reductions being seen across all operating regions; turnover in France dropped 7.0% while in Poland there was a 9.4% decrease. The company attributed this to heightened competition in mobile markets. Restated EBITDA for the three-month period was down 7.8% to EUR2.87 billion.

In operational terms, Orange Group claimed 236.3 million customers worldwide at the end of 2013, up from 230.7 million twelve months before. Mobile subscribers accounted for 178.5 million of these, while the fixed broadband internet user base climbed from 14.9 million at end-2012 to 15.5 million a year later. Mobile operations France reported 176,000 net customer losses over the year, taking the total user base to 27.0 million, while the fixed telephony unit saw customer numbers fall by around half a million to 17.1 million. In Spain, the mobile subscriber total rose from 11.8 million to 12.4 million, while in Poland there was a rise to 15.3 million, from 14.9 million at end-2012. The figure for the Rest of World segment was up by around six million to 111.4 million.

France, Orange Group