France Telecom raises dividend, looks bullish

France Telecom today said it is well placed to win market share in 2009 despite the slump, when announcing its 2008 earnings and a 7.7% dividend rise, reports Reuters.

Europe's third largest telecoms operator in market value terms behind Vodafone and Telefonica said it would continue to generate cash flow, as previously stated, in 2009 and beyond at €8 billion. It also pledged to maintain capital expenditure at  12-13% of sales.

As we reported last week, France Telecom's earnings follow positive results from European Deutsche Telekom and Telefonica.

France Telecom's 2008 organic cash flow rose to €8 billion from €7 billion in 2007, in line with its target of organic cash flow of more than €7.8 billion.

This brought its ratio of net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) to 1.85 at the end 2008, in line with a target of keeping the ratio at less than 2, Reuters said.

EBITDA rose 1.5 percent to €19.4 billion on revenue of €53.5 billion, up 1%: on a comparable basis revenue rose 2.9%. The group proposed a 2008 dividend of €1.40, up from €1.30 in 2007.

France Telecom is clearly nothing daunted by Vivendi stating yesterday  that it would present a case to the European Commission because the French incumbent was exploiting its dominant market position.

Vivendi's CEO claimed that France Telecoms still makes 85% of the profits available from French fixed line telecoms, even 11 years after supposed liberalisation of the market.

France Telecom's stock closed at €17.41 on Tuesday, giving it a market value of €45.5 billion, according to Reuters.

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