French telecoms heavyweight Orange Group (formerly France Telecom) has reported that its consolidated revenue for the three months ended 31 March 2014 fell 3.8% year-on-year (on a comparable basis), to EUR9.8 billion (USD13.6 billion) from EUR10.2 billion in 1Q13. Excluding the impact of certain regulatory measures, Orange said that revenue slipped 3.0% y-o-y, a marginal improvement of 0.8 percentage points, when compared to the ‘trend’ of Q4 2013. In the January-March quarter, restated earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell by 3.8% to EUR3.02 billion from EUR3.14 billion previously. Excluding the impact of regulatory changes, the fall was 3.3%, it said. EBITDA margin (on a comparable basis) was 30.8% for the quarter, stable y-o-y. CAPEX for the period reached EUR1.16 billion, equivalent to 11.8% of revenues (+0.6% percentage points compared to the first quarter of 2013 on a comparable basis), as the carrier continued to focus on growth in fixed and mobile ultra-high speed broadband networks. Looking forward, Orange Group has stabilised its restated EBITDA margin in the first quarter of 2014 and confirmed its targets for 2014.
Commenting on the results, Stephane Richard, chairman and CEO of the Orange Group, said: ‘Orange’s first quarter 2014 performance was very satisfactory, aided in large part by the continued strong commercial momentum in our core countries. Orange benefits from the efficient segmentation of its offers as well as its investment in very-high speed broadband – fibre and 4G – which enable the Group to differentiate itself from the competition. Continued efforts to improve the Group’s cost structure allowed us to stabilise our profit margin from the first quarter and to confirm our full-year targets for 2014. I want to thank all the employees at Orange for these results which are very encouraging for the future.’
Operationally speaking, the Orange Group had a total of 239.4 million customers at 31 March 2014, a year-on-year increase of 4.2% (+9.6 million in terms of net additions).Mobile subscribers accounted for 181.7 million of these, while the fixed broadband internet user base climbed from 15.5 million at end-2013 to 15.6 million three months later. The Group reported that ‘commercial momentum’ remains resilient, driven by new mobile contract offers in Europe and growth in Africa and the Middle East. In its home market, Orange reported net sales of 86,000 contracts in 1Q14, compared to negative net sales in all first quarters since 2010. The telco said its ‘Origami’ and ‘Open’ premium offers represented more than 60% of gross consumer sales during the period under review. In addition, the acceleration of fibre-optic sales was confirmed with 47,000 new customers added in the first quarter, giving a base of 365,000 customers at 31 March 2014 (+15% in three months). In Spain the local unit reported a 6.4% net increase in mobile users and accelerated growth in the fixed broadband base (up 23.7% y-o-y). Meanwhile, in Poland Orange said that recovery in the mobile base, which started in the fourth quarter of 2013, continued, while in Africa and the Middle East, the overall mobile customer base increased by 11.4% y-o-y, to reach 91.3 million customers at 31 March 2014 (including 3.3 million net additions in the first quarter). Finally, it said that Orange Money had 9.9 million customers at the same date.