Orange produced first-quarter earnings figures that indicated the France-based operator had made a "decent" start to the year according to some analysts, while the company was also able to confirm its outlook for 2015.
Although restated EBITDA fell by 1.9 per cent year-on-year to €2.9 billion ($3.2 billion), analysts from Jefferies noted that the overall trend is "fairly solid" with respect to EBITDA performance in recent quarters. For example, Q1 2015 EBITDA was down by €55 million year-on-year, compared to a drop of €122 million year on year in Q1 2014.
Other analysts were more critical of the company's performance, with Banco Espirito Santo de Investimento noting that the "pace of [operating expense] reduction was not impressive," Reuters reported.
Nonetheless, Orange confirmed its previously stated full-year 2015 financial targets for restated core profit of €11.9 billion to €12.1 billion, which is down slightly from the €12.19 billion for 2014.
Meanwhile revenue development was above consensus in the first quarter, Jefferies analysts said, dropping by 0.9 per cent year on year to €9.7 billion. In France, where Orange has been slowly extricating itself from a protracted and painful price war, sales were down 1.8 per cent at €4.7 billion.
Jefferies was particularly struck by the company's success in selling mobile equipment in France, which the analysts attributed to the introduction last year of an instalment payment scheme for handsets. While mobile services revenue dropped by 4.2 per cent, the analysts said mobile equipment sales were up by 25 per cent.
"Orange reports that two-thirds of sales were SIM-only of which more than half were to premium Origami/Open offers and many of these subs take a handset instalment plan," Jefferies commented.
Orange said it added 2.8 million customers to its overall base during the quarter, led by growth in Africa and the Middle East where the number of customers increased by 11.3 per cent from last year to 100.6 million. The total Orange customer base now stands at 247 million.
The company said the number of net mobile contract additions in France reached 164,000 in the quarter and represented an almost two-fold increase from last year (+85,000). In Spain, mobile contracts increased by 5.8 per cent.
Orange Poland recorded impressive growth in 4G contract sales, which grew by 47 per cent in the three-month period. Belgian unit Mobistar also reported a 19 per cent rise in 4G contract sales. The Orange Group now has more than 10 million 4G customers in Europe, with 4.5 million in France.
In the coming months, Orange said it will focus on implementing the new Essentials2020 strategy introduced in March. The five-year plan will see the France-based operator spend more than €15 billion on its fixed and mobile networks between 2015-2018.
For more:
- see this Orange results release
- see this Reuters article
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