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Orange's fibre deals help offset COVID hit in third-quarter

Mathieu Rosemain
·2-min read
FILE PHOTO: The logo of French telecoms operator Orange is pictured in a retail store in Bordeaux
FILE PHOTO: The logo of French telecoms operator Orange is pictured in a retail store in Bordeaux

By Mathieu Rosemain

PARIS (Reuters) - Deals to open up Orange's <ORAN.PA> fibre network to rivals helped France's biggest telecoms operator offset the financial hit from the coronavirus crisis in the third quarter.

The agreements with competitors Iliad <ILD.PA> and Bouygues Telecom <BOUY.PA> lifted Orange's quarterly sales in France by 3.1% year-on-year, the company said on Thursday.

That helped to limit a decline in Orange's quarterly core operating profit - which came in at 3.58 billion euros (3.3 billion pounds) - to 0.4%. Analysts had forecast a decline of 0.6%, according to the average forecast of 19 compiled by the company.

Quarterly group sales rose 0.8% to 10.6 billion euros, also beating the mean forecast.

Since 2009, Orange has received 2.4 billion euros in proceeds from so-called co-financing deals with rivals for its fibre network in France, it said.

However, the impact of the coronavirus crisis slashed nearly 150 million euros from core operating profit in the third quarter, as Orange received fewer lucrative roaming fees from summer travellers.

"The summer quarters are very, very big quarters for roaming, since you have all the travellers ... especially for Orange where you have countries of destination in the south, such as France and Spain," Chief Financial Officer Ramon Fernandez said in a call with reporters.

He said the impact would be significantly less important in the fourth quarter.

Orange confirmed its full-year targets, including an expected drop of around 1% in core profit. It will increase its interim dividend by 10 euro cents to 40 cents and pledged to return to a dividend of 0.70 euro per share for 2020.

British rival BT Group <BT.L> nudged up its earnings guidance on Thursday, while Spain's Telefonica <TEF.MC> posted a quarterly net loss due to an impairment charge in Argentina.

(Reporting by Mathieu Rosemain; Editing by Sherry Jacob-Phillips and Mark Potter)