By Gianluca Lo Nostro and Leo Marchandon
(Reuters) – French telecom operator Orange on Thursday reported a fourth-quarter core profit that beat market expectations, as its home market swung into profit.
The company’s Paris-listed shares jumped 2.5% to levels last seen in April 2024 in early trading.
Group earnings before interest, taxes and depreciation and amortisation after leases (EBITDAaL) – a common metric used by telecom firms to measure core profit – rose 3.2% to 3.25 billion euros ($3.39 billion) in the fourth quarter of last year.
A company-provided consensus had expected 3.21 billion euros.
The company’s core profit in France rebounded for the first time since 2020, driven by price increases, despite facing stiff competition from no-frills brands, diminishing household budgets, price pressure from peers like Iliad and Bouygues, and a decline in demand for broadband services post-pandemic.
“Our drivers (in France) have been the retail services, which are up 2.6%. And this is a combination of value strategy with price increases and a very good management of our base,” CFO Laurent Martinez said in a call with reporters.
J.P. Morgan said in a note that the outlook for EBITDAaL in France is expected to be upgraded after fourth-quarter results.
Martinez said Orange has been using artificial intelligence for a number of years and is investing 6 billion euros of capex per year.
The company currently has 150 active AI use cases, which generated 200 million euros in value in 2024 and expects to generate more than 300 million euros in 2025 with the help of the technology.
In November, Orange struck a multi-year partnership with OpenAI in Europe, giving the telecom operator access to pre-release AI models.
By the end of 2024, Orange had expanded its FTTH (fiber to the home) connectivity to 60.1 million households globally, reflecting a 9.3% annual increase. Its FTTH customer base increased to 13.5 million, a 14.3% year-over-year rise.
Orange confirmed its 2025 targets and raised its organic cash flow target to at least 3.6 billion euros.
($1 = 0.9585 euros)
(Reporting by Gianluca Lo Nostro and Leo Marchandon in Gdansk; Editing by Eileen Soreng)
