Orange on track with FY targets after small rise in H1 results

Orange reported a small increase in revenues and EBITDA for the second quarter, driven by demand for its convergent offers as well as strong growth in Africa, the Middle East and Spain. The company said it achieved its cost savings targets six months ahead of schedule and was on track for stronger growth in adjusted EBITDA and operating cash flow this year.

Total revenues in Q2 rose 0.7 percent to EUR 10.18 billion. Comparable growth reached 1.4 percent, lower than the 2.0 percent in Q1. France grew 0.8 percent on a comparable basis and Spain 1.8 percent, while the MEA region was up 5.2 percent excluding currency effects.

The French operator’s adjusted EBITDA increased 2.3 percent to EUR 3.38 billion and rose 3.0 percent on a comparable basis. The margin improved to 33.5 percent from 32.8 percent a year ago. With savings of EUR 486 million in the first half of 2018, the Explore2020 programme for EUR 3 billion in costs cuts over the 2015-2018 period was exceeded six-months early.

Orange spent EUR 3.37 billion on capex in the first half of 2018, in line with its full-year outlook for EUR 7.4 billion. Despite the small rise in capex, operating cash flow was still up 2.4 percent to EUR 2.62 billion.

Orange said the higher investment was reflected in the customer growth and rising ARPUs. The company had over 50 million 4G customers at the end of June, twice as many as a year ago. Fibre growth was also strong in Q2, with a record 119,000 net additions in France, 135,000 in Spain and 39,000 in Poland. In addition, the number of fixed-mobile convergent subscribers rose 9.0 percent year-on-year to 10.7 million, and the associated Sim cards increased 12 percent to 18.0 million.