Iliad stock suffers despite profit

French ISP Iliad beat analyst’s full-year profit forecasts by almost €20 million in 2010, but its stock price took a hit on lower-than-expected subscriber additions.
 
Net profit grew 78% to €313.1 million in 2010 as the firm broke internal records with revenues of €2 billion on the back of growth in its Free fixed broadband brand, and the financial recovery of Italian ISP Alice, which Iliad acquired in 2008.
 
Analysts polled by Bloomberg had predicted net profit in the range of €296 million.
 
A reduction in net debt aided cash-flow during the year, and ran against the flow of increased expenditure as the firm won a fourth mobile operating license issued by French regulator Arcep for €240 million.
 
The firm improved its EBITDA ratio by 5.4 percentage points to 39.2%, growing the figure 20.7% to €798 million during the year. Iliad states the rise is mostly due to a positive impact from local unbundling rates, with new cluster nodes deployed during the year allowing it to grow the proportion of unbundled customers 3.8 percentage points to 89.2%.
 
Broadband subscriber numbers grew from 4.4 million to 4.5 million during the year, however analysts were disappointed the firm added only 6,000 users in 4Q, Bloomberg said, adding that the firm’s stock price registered the biggest day-on-day fall since September 2010 as a result.
 
The figure continued to slide in early trading this morning, falling 1.2% by 10.30 am.
 
Iliad plans to sign up 100,000 FTTH subscribers by the year-end, and is sticking to its target of covering four million homes with fiber by end 2012. In mobile, the firm aims to cover 27% of the population with a proprietary network by January 2012, and plans a commercial launch soon after.

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