Orange: drop in fiber co-financing weighs on Q3 results – archyworldys

PARIS (Reuters) – Orange on Tuesday reported a drop in revenue and its key profitability indicator in the third quarter, as the drop in co-financing received from other operators on the fiber network eclipsed a good commercial performance on the period.

The turnover of the telecoms operator came to 10.508 billion euros, down 0.4% on a comparable basis, while the Ebitdaal fell 0.7% to 3.55 billion euros.

For the deployment of its fiber network, Orange can join forces with other operators to pool investments. It therefore receives cofinancing which was particularly important in the third quarter of 2020.

Without the impact of the drop in co-financing, Orange’s turnover would have increased by 1.3% thanks to the increase in retail services and the EBITDAAL of 4.5%, thanks to the commercial momentum and lower costs.

In France, the turnover of the telecoms operator fell by 4.1% in the third quarter due to the co-financing effect and the slowdown in equipment sales which had jumped in the second quarter with the reopening of stores.

In Spain, where Orange is struggling in the face of increased competition, sales fell 4.4%.

The group had to write in July a depreciation of 3.7 billion euros related to the goodwill of the activities in Spain.

“If the market remains very fragmented and impacted by the health crisis, the trend in the turnover of retail services is improving quarter after quarter”, commented in a press release CEO Stéphane Richard, about the performance in Spain .

“The results are therefore encouraging, and while much remains to be done, we are fully mobilized in the execution of our recovery strategy,” he added.

Orange has confirmed its financial objectives for 2021, which notably provide for a “stable negative” Ebitdaal and an organic cash flow from telecoms activities in excess of 2.2 billion euros.

(Report Blandine Hénault, edited by Bertrand Boucey)