Second quarter brings operator results up from first quarter doldrums
France-based telecoms provider, Orange, has stated its first half results show a move to recovery in the second quarter driven by the fast growth of its 4G services throughout Europe, following losses in the first quarter.
Revenues rose 0.4% in the second quarter of 2015, excluding the impact of regulatory measures, after falling 0.3% in the first quarter.
In the first half of 2015, revenues were Euro 19.557 billion, a decrease of 0.6% on a comparable basis (stable excluding the impact of regulatory measures). In view of the results for the first half of 2015, the Group has confirmed its objective to achieve between Euro 11.9 billion and Euro 12.1 billion in restated EBITDA for the full year of 2015.
This target does not include the integration of Jazztel and Méditel, which will be consolidated in the Group accounts in the second half of 2015.
In the second quarter the rebound of the Enterprise segment and the favourable development of mobile services, particularly in France and Spain, helped the company’s recovery, while Africa and the Middle East continued their steady growth.
Commercial operations at Orange delivered a satisfactory performance in the first half of 2015 across the Group, with the rapid growth of very high speed fixed and mobile services in Europe and the sustained growth of mobile services in Africa and the Middle East.
France had 240,000 net additions of mobile contracts in the first half of 2015, while 4G had a total of 5.6 million customers at 30 June 2015, up 1.1 million in the second quarter.
Fixed broadband, with a market share of net additions estimated at 46% in the second quarter, had 143,000 net additions in the first half, led by fibre, which had a total of 720,000 customers at 30 June 2015 (up 157,000 in the first half).
In Spain, 4G grew strongly with 3.5 million customers at 30 June 2015 (up 582,000 in the second quarter). At that date, there were 159,000 fibre customers, an increase of 47,000 customers in the second quarter.
The growth of 4G was also strong in the other European countries with 1.3 million customers in Poland, 700,000 in Belgium, 600,000 in Romania and 400,000 in Slovakia at 30 June 2015.
In Africa and the Middle East, the mobile customer base continued to rise with 4.5 million net additions in the first half (on a comparable basis); Orange Money had 14.2 million customers at 30 June 2015 (up 37% year on year).
Restated EBITDA rose 0.9% in the second quarter, excluding the impact of regulatory measures, after declining 1.2% in the first quarter. Optimisation of the cost structure continues with the ongoing reduction of indirect costs (Euro 156 million in the first half). Restated EBITDA was Euro 5.807 billion in the first half of 2015, down 1.2% on a comparable basis (stable excluding the impact of regulatory measures). The ratio of restated EBITDA to revenues was 29.7%, a limited decrease of 0.2 percentage points in relation to the first half of 2014 on a comparable basis; it was stable excluding the impact of regulatory measures.
CAPEX (Euro 2.672 billion in the first half) increased 6.5% on a comparable basis and represented 13.7% of revenues (up 0.9 percentage points in relation to the first half of 2014). In line with the Orange Essentials2020 strategic plan, investment in fibre rose sharply (up 74% compared to the first half of 2014), mainly in Europe and particularly in France.
Net income was Euro 1.273 billion in the first half of 2015, an increase of Euro 545 million in relation to the first half of 2014. Net income Group share was Euro 1.099 billion in the first half of 2015, compared to Euro 581 million in the first half of 2014.
Net debt was Euro 26.384 billion at 30 June 2015, nearly stable in relation to 31 December 2014. The restated ratio of net financial debt to EBITDA was 2.13x at 30 June 2015, versus 2.09x at 31 December 2014, in line with the objective of a ratio of around 2x in the medium term.
Commenting on the first half 2015 results, Orange Group Chairman and CEO Stéphane Richard said: “We are particularly pleased with these results which mark a return to revenue growth in the second quarter, excluding regulation, for the first time since 2011. We delivered a very good commercial performance especially in France, Belgium, Romania and throughout the Africa and Middle East region. This dynamic commercial activity is underpinned by significant investment in very high speed fixed and mobile broadband and the Orange team’s daily commitment to our customers, both of which form part of our Essentials2020 strategic plan. Through these efforts, we now have more than 12 million 4G customers in Europe and have doubled our level of acquisition of fixed broadband customers in France thanks to fibre.”
Richard continued: “Combined with the continued reduction of our cost structure, this performance has enabled us to stabilise our margin in the first half, excluding regulatory impacts, and even show slight growth in the second quarter. We therefore fully confirm all our financial objectives for 2015.”