Monday, May 4, 2009

France Telecom Q1 Profits Fall Due to TV Services

France Telecom has reported a 4.4% drop in first-quarter profits due to costs incurred by its French television services. EBITDA was down 4.4% on a comparable basis, at EUR 4.3 billion. The EBITDA margin dropped 1.7 points from the first quarter of 2008.

Revenues grow 0.4% on a comparable basis, but currency fluctuations resulted in recorded sales dropping to EUR 12.7 billion from EUR 13 billion a year ago. The firm cited a strong performance in France with revenues up 2.1%, in Africa and Middle East (+5%) and in Enterprise services (+0.4%). United Kingdom trend was unchanged from fourth quarter of 2008 (-0.6%); as anticipated, revenues dropped in Spain ( 4.1%) and in Poland (-4.7%).

The company reported worldwide that it had 122.9 million customers at 31 March 2009 (excluding MVNOs), a 9.5% increase year-on-year. The number of contract customers continued to grow rapidly, up 9.0% in one year. The number of 3G broadband customers was up nearly 80% in one year, with 20.6 million customers at 31 March 2009.

The MVNO customer base in Europe rose to 3.6 million at 31 March 2009 (of which 1.9 million in France), compared with 2.2 million a year earlier (of which 1.5 million in France).

Commenting on the results for the first quarter of 2009, Didier Lombard, France Telecom Chairman and Chief Executive Officer, stated: "In an economic environment that continues to weaken, especially outside of France, the Group has been able expand its customer base in the first quarter of the year to more than 183 million customers, with the number of mobile customers increasing more than 9% to almost 123 million and broadband services rising nearly 9% to 13 million ADSL-equipped households."

He added, "The Group is able to confirm its guidance of 8 billion euros in organic cash flow for 2009, despite the pressures on consumer and business behaviour resulting from the overall economic conditions."

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