Numericable-SFR reported strong growth in core earnings in the second quarter of 2015, and also said revenue trends improved both sequentially and compared to the same period of last year.
The company, which this week became the second France-based operator after Orange to report a positive set of results that signalled an end to a three-year mobile price war, said its "strong growth trajectory seen in the first quarter" was confirmed in the second quarter, with adjusted EBITDA rising 19 per cent to €1.06 billion ($1.2 billion).
The adjusted EBITDA margin also increased by 7.2 percentage points to 38.4 per cent. Numericable-SFR said it was confident of achieving its medium-term target of a 45 per cent adjusted EBITDA margin.
Reuters noted that the improved earnings at the Altice-owned company were primarily due to cost cuts, as Numericable-SFR continued to lose customers to rivals. For example, the total number of mobile customers stood at close to 22 million by the end of June 2015, compared to just over 23 million a year previously. This caused a reduction in second-quarter revenue by 2.4 per cent to €2.78 billion.
However, the company said efforts to overhaul its mobile offers in May started delivering results in June, with gross sales up 40 per cent compared to the remainder of the first half of 2015. It added that its focus on high-end customers and quadruple play "is now bearing fruit in both fixed and mobile."
Like its rivals Orange and Bouygues Telecom, Numericable-SFR has been battling a price war sparked by the launch of low-cost mobile offers from Free Mobile in January 2012.
Orange has also suffered considerably from this attack on its mobile customer base. However, the operator's second-quarter results also indicated that the worst might be over.
Commenting on the company's results for the second quarter and first half of the year, Orange CEO Stephane Richard said they "mark a return to revenue growth in the second quarter, excluding regulation, for the first time since 2011."
Indeed, if regulatory effects are stripped out, Orange reported a small 0.4 per cent rise in Q2 revenue to €9.89 billion. Restated EBITDA was also up by 0.9 per cent at €3.29 billion, also excluding regulatory effects. Including these effects, EBITDA fell by 0.4 per cent.
The company noted that the improving revenue trend reflected a recovery in the enterprise segment and the "favourable development of mobile services, particularly in France and Spain, while Africa and the Middle East continued their steady growth."
Orange also confirmed its objective to achieve between €11.9 billion and €12.1 billion in restated EBITDA for the full year of 2015.
For more:
- see this Reuters article
- see the Numericable-SFR results
- see Orange's results
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