Orange sees return to core earnings growth in 2022

Band Mathieu Rosemain

PARIS, February 17 (Reuters)Orange ORAN.PAFrance’s largest telecom operator, expects a return to core earnings growth in 2022 after falling returns from co-financing deals and stiff competition in the Spanish market hit earnings last year.

The former state-controlled monopoly is struggling to maintain strong upward revenue momentum, caught between the need to modernize networks and compete in a fragmented European telecommunications market.

Orange expects earnings before interest, tax, depreciation and amortization after leasing (EBITDAaL) to grow by 2.5% to 3% in 2022, compared to a decline of 0.5% in 2021.

It also expects cash flow from telecoms activities to be above 2.9 billion euros, an improvement on the 2.4 billion collected last year.

Revenues increased by 0.8% in 2021 compared to the previous year to reach 42.5 billion euros.

Orange is preparing for a governance overhaul as its new chief executive, Christel Heydemann, is due to take office on April 4 after a 12-year term from Stéphane Richard.

Richard’s departure was rushed after a court found him guilty of complicity in the embezzlement of public funds. Richard denies any wrongdoing.

Heydemann will take the reins of the group, whose stock market performance is lagging behind its peers, as it pursues a turnaround in the Spanish division and amid high market expectations for deals in the mobile tower sector.

In a call with reporters, chief financial officer Ramon Fernandez said Orange’s Totem division, which has around 26,000 tower sites in France and Spain, was well positioned should a deal be struck this year.

It confirmed the objective of a return to basic operational growth in Spain, its second market after France, in 2023.

Orange maintained its dividend policy of 0.70 euros per share in 2022 and confirmed organic cash flow from telecom activities of at least 3.5 billion euros next year.

($1 = 0.8807 euros)

(Reporting by Mathieu Rosemain; Editing by Rashmi Aich and Subhranshu Sahu)

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