Orange (FNCTF) revealed a first-quarter core operating profit that met market expectations, bolstered by another quarter of strong revenue growth from its Africa and Middle East operations.
The company’s earnings before interest, taxes, depreciation, amortization, and the cost of leased assets (Ebitdaal), the metric preferred by the company, climbed 2.3% to 2.41 billion euros ($2.58 billion) in the quarter, compared with an estimate of 2.40 billion euros in a company-compiled poll.
The company also reported a slight increase in its quarterly revenue, rising to 9.85 billion euros ($10.54 billion) from 9.65 billion euros a year earlier. However, this was below the anticipated 10.79 billion euros, according to two estimates from FactSet.
Shares fell more than 2.3% in Paris trading Wednesday.
The revenue from its Africa and Middle East segment saw a robust increase of 11%.
Despite the mixed results, Orange reaffirmed its full-year outlook, expecting low single-digit growth in EBITDAaL and a minimum organic cash flow from telecom activities of 3.3 billion euros.
“Orange saw Group EBITDAaL growth accelerate to +2.3% YoY in Q1 2024, from +2.0% in Q4 2023, despite the de-consolidation of Orange Spain, which we estimate represented ca 1.2ppts of the Q4 Group EBITDAaL growth rate of 2.0%,” Morgan Stanley analysts said.
“We believe this points to better EBITDAaL growth rates in France, already this year, where EBITDAaL was under reasonably heavy pressure last year, due to energy costs and weaker wholesale profits,” they added.