Orange SA misses expectations but gets profit boost from EE sale

Billy Bambrough
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The sale of Orange's UK joint venture EE – along with Deutsche Telekom – was completed in January (Source: Getty)

Orange SA – France's largest telecoms company – has posted a sharp rise in its first-half profits due to the sale of its UK network EE to BT.

Net profit climbed to €3.17bn (£2.65bn) in the first half, pushed higher from the £12.5bn EE sale.

Revenue also climbed thanks to strong sales growth in Spain. It rose by 2.7 per cent to €20.8bn.

Orange is being forced to cut prices for mobile and broadband services around Europe due to high levels of competition for market share.

Read more: Yah-ooh dear – Verizon reports five per cent revenue fall

Competition in the mobile market in the US is forcing Sprint – the fourth largest US carrier – to make similar cuts in a bid to attract customers.

Orange said adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) rose 2.3 per cent to €3.34bn on revenue of €10.07bn ror the three months to 30 June.

Analysts polled by FactSet had forecast adjusted Ebitda of €3.34bn on sales of €10.12bn for the period.

The sale of Orange's 50 per cent stake in EE to BT in late January involved a £3.44bn cash offering and a four per cent stake in BT.

Read more: Ofcom announces reform plans for Openreach – or it risks being split from BT

BT's interest in EE was driven by a desire to be able to offer so-called quadplay to consumers – where a customer is sold fixed-line phone, mobile, internet and TV services as one package.

Virgin Media and TalkTalk are already making a success of the strategy while Vodafone and Sky are gearing up to do the same.

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