Orange reveals increase in EBITDA margin from telecom activities

Orange revenue Q2 2017Telecom operator Orange has revealed how it achieved an increase in EBITDA margin from telecom activities during the first half of 2017.

Orange Group’s adjusted EBITDA was 5.978 billion euros (+2.2 percent or +130 million euros) in the 1st half of 2017. Adjusted EBITDA from Orange’s telecom activities was 6.005 billion euros (+2.4 percent or +140 million euros).

Orange Group said adjusted EBITDA margin for telecom activities was 29.6 percent (+0.4 percentage points) in H1.

Adjusted EBITDA from telecom activities was 3.393 billion euros (+2.5 percent or +83 million euros) with an adjusted EBITDA margin of 33.2 percent (+0.4 percentage points) in the second quarter of 2017.

Orange said the increase of 140 million euros towards EBITDA was related to revenue growth of 222 million euros, partially offset by increased operating costs of 82 million euros.

Orange Group faced increased costs from content and equipment for customers and, income tax and operating taxes and decreased income from the sale of fixed assets. Labor expenses related to telecom activities fell 4 percent after reducing the number of employees by 2.7 percent.

Orange has also lowered advertising and promotional expenses.

“We have converted more than half of our revenue increase into EBITDA, demonstrating a good balance of growth and profitability. This has enabled us to reaffirm our objective of delivering growth in adjusted EBITDA for the full year 2017,” said Stephane Richard, chairman and CEO of the Orange Group.

Capex

Orange Group’s Capex of 3.276 billion euros in the first half of 2017 increased 3 percent. While the ratio of Capex to revenues for the telecom activities was 16 percent (+0.2 percentage points). The telecom operator’s Investments in fibre and in 4G and 4G+ networks rose 16.5 percent.

Investments in fibre increased 5 percent and mainly concerned France, Spain and Poland. Number of households with fibre connectivity was 10.7 million in Spain (+2.4 million), 7.9 million in France (+2.0 million) and close to 2 million in Poland (+0.9 million).

Orange said 4G coverage was 92 percent of the population in France, 93 percent in Spain, 99.8 percent in Poland, 99.6 percent in Belgium, 87 percent in Romania, 80.1 percent in Slovakia, and 98 percent in Moldova.

4G+ deployment also continued in France and in the other European countries.

Orange deployed 3G in all 21 countries and 4G in 11 in Africa & Middle East countries.

Revenue

Orange revenues were 20.276 billion euros (+1.1 percent or +222 million euros) in the first half of 2017 – due to to the recovery in the Africa & Middle East segment.