Orange's earnings pressured by pandemic woes, Spain

PARIS (Reuters) -Orange, France's biggest telecoms firm, said on Thursday the COVID-19 pandemic continued to weigh on its first-quarter results, which was also marked by a new steep fall in sales in Spain.

The former monopoly reported a 0.3% drop in core operating profit on a comparable basis from a year earlier to 2.57 billion euros ($3.1 billion), in line with market expectation, reflecting the prolonged financial hit caused by the reduction of lucrative roaming fees.

These plummeted by 31% over the first three months of year as would-be travellers stayed at home, Orange said. In addition, Spain, Orange's second-biggest market, recorded a 7.4% drop in quarterly revenue as heavy competition sapped sales and profits.

"We know it's going to be a long drawn-out process, in a very competitive and fragmented market," Chief Financial Officer Ramon Fernandez said in a call with reporters, confirming that the group didn't see a return to positive profit trends in Spain before 2022.

Group revenues edged up by 0.5% on a comparable basis to 10.3 billion euros, thanks to equipment sales and Orange's IT business.

Orange group confirmed its full-year targets, including a slightly lower full-year core operating profit compared to 2020 and an organic free cash flow from telecoms activities above 2.2 billion euros.

($1 = 0.8313 euros)

(Reporting by Mathieu Rosemain; Editing by Shailesh Kuber)