By Olivier Sorgho and Leo Marchandon
(Reuters) -French telecom services provider Orange reported a rise in second-quarter core profit on Wednesday, boosted by strong sales in Africa and the Middle East, and price increases in Europe.
Core profit after leases, excluding the company’s Spanish operations, rose 2.6% year-on-year to 3.11 billion euros ($3.37 billion), in line with a company-provided consensus that had expected 3.10 billion.
That was helped by Africa and the Middle East where sales grew 10.3%. In Europe, they declined 2.2%, but Orange still made a profit there, as it raised prices when some of its rivals have cut them.
An Orange mobile package is the most expensive in France, costing about 27 euros, while rival Free’s offer costs about 11 euros, and SFR’s about 14 euros, according to a report by telco analysis site Zone ADSL.
“We have no room and no environment to do a ‘big bang’ price increase,” CEO Christel Heydemann told analysts, but added that in the second half of 2024, Orange would further benefit from existing price hikes in France.
The group has lost some broadband customers in its home market, also due to inflation.
“There was definitely a bit of competitive pressure on the low-end of the market, on the mobile,” CFO Laurent Martinez told reporters.
Overall, Orange gained a net 104,000 mobile customers in France, mainly through its low-cost brand Sosh. But it lost some fixed broadband customers.
J.P. Morgan in a note said the results were robust, with sales and profits in line with expectations.
Orange also announced a non-binding agreement with Vodafone Spain to create a shared fibre-to-the-home (FTTH) company that would cover about 4 million customers.
MasOrange, its JV in Spain, would hold 50% in this project, and Vodafone up to 10%, Heydemann said, adding they would seek to bring in a third investor, likely an infrastructure fund.
The group confirmed its full-year guidance.
($1 = 0.9217 euros)
(Reporting by Olivier Sorgho and Leo Marchandon; Editing by Christian Schmollinger, Alex Richardson and Barbara Lewis)
