Bouygues Telecom maintains 2015 outlook after posting Q1 loss

Bouygues Telecom remains in a confident mood for 2015 despite swinging to a net loss of €49 million ($54 million) in the first quarter of the year compared to a net profit of €75 million a year previously.

The France-based operator reiterated its previous outlook that EBITDA would remain stable in 2015. It is also forecasting a return to positive free cash flow in 2016 following the completion of its transformation plan, and as a result of €300 million in savings compared to the end of 2013. EBITDA was unchanged at €118 million in the first quarter of 2015.

The company reported a current operating loss of €62 million, a reduction of €2 million in the loss versus the first quarter of 2014. The company said the change in operating profit (a decrease of €220 million year-on-year) factored in non-current income of €200 million in the first quarter of 2014 compared with €22 million in non-current charges related to the start of the network sharing agreement with Numericable-SFR in the first quarter of 2015.

Analysts from Jefferies International also expressed some approval of the company's first-quarter performance, noting that EBITDA trends have improved to stable and churn is reportedly down.

"Bouygues Telecom results would appear to indicate rather benign market conditions, something also evident in Orange's 1Q result," the analysts said, adding that Numericable-SFR's management also stated its view this week that the mobile price war in France is "over".

In a conference call to discuss the results, Bouygues Group CFO Philippe Marien said the performance of the telecoms unit in the first quarter showed that Bouygues Telecom's standalone strategy is the right one.

Last year, Bouygues Telecom unveiled a new range of mobile plans to boost its ongoing efforts to increase its competitiveness in a market with four players. Marien added that there are no talks of any kind on Bouygues Telecom with any telecoms operator, according to Reuters.

During the coming year, Bouygues Telecom said it will continue to implement the network-sharing agreement with Numericable-SFR group, which will result in a write-down of assets. "In all, these elements could generate non-current charges of around €200 million, which will affect the group's operating profit in 2015," Bouygues said.

For more:
- see the Bouygues Group results for Q1 2015
- see this Reuters article

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