By Leo Marchandon
(Reuters) -French telecom operator Orange reported quarterly core profit that slightly surpassed market expectations on Thursday, citing rigorous cost control and customer growth, and raised its full-year earnings guidance.
Its earnings before interest, taxes, depreciation and amortisation after leases (EBITDAaL) — a common metric used by telecom firms to measure their core profit — rose 3.7% to 3.44 billion euros ($4.01 billion) in the third quarter of the year.
Analysts had forecast a core profit of 3.43 billion euros on average, a company-compiled consensus showed.
Orange also upgraded its full-year guidance. It now expects EBITDAaL growth of at least 3.5%, versus more than 3% previously.
The company reported an increase in fibre-to-the-home customers to 16 million globally, up from 15.5 million at the end of the prior quarter, while its global mobile customer base grew to 100.4 million from 98.1 million three months ago.
Chief Financial Officer Laurent Martinez stated during a call with reporters that Orange’s strong balance sheet enables it to pursue acquisition opportunities in France and Spain.
The operator has submitted a bid for the remaining 50% stake in Spanish operator MasOrange, and a 17-billion-euro joint offer with Bouygues and Iliad’s Free for SFR in France.
Martinez noted that SFR-owner Altice France’s rejection of the bid for most of its assets was anticipated, but the consortium remains committed to pursuing the offer.
Quarterly revenue in France, Orange’s core market, declined 3.7% year-on-year despite reaching the milestone of 10 million fibre customers. The decrease comes from an expected 9% drop in revenue from other operators using Orange’s infrastructure, reflecting decommissioning of copper lines, the company said.
($1 = 0.8575 euros)
(Reporting by Leo Marchandon in Gdansk; Editing by Milla Nissi-Prussak and Matt Scuffham)
