France Telecom dividend slashed on earnings drop
FRANCE Telecom, the parent body of Orange UK, cut dividends for the next two years by almost 15 per cent as it continues to lose customers to low-cost rival Free Mobile.
Full year net income attributable to equity owners dropped 20 per cent to €3.9bn as the group struggled in the face of Europe’s economic headwinds.
Earnings before interest, taxes, depreciation and amortisation were down five per cent to €15.1bn as sales at France Telecom came in at 1.6 per cent lower than last year, at €45.3bn.
Chief executive Stephane Richard put this down partly to the increasing cost of borrowing since France lost its top credit rating and the loss of 201,000 customers.
The telco also postponed the share buyback it promised investors when it sold its Swiss arm for $1.5bn in December, and said it expected an uncharacteristically quiet year ahead in terms of acquisitions and big deals.
Shares rose two per cent to €11.66.