(MENAFN- AFP) French telecom group Orange reported a near one-third plunge in net profit in the first half of the year but stood by its targets for the whole of 2014.
The group, formerly France Telecom and caught in a mobile-phone price war and restructuring of the entire French telecoms sector, said it had cut its costs and steadied underlying performance.
Net profit for the six months amounted to 744 million euros ($999 million), down by 30.3 percent from the equivalent figure last year, from sales of 19.5 billion euros.
Orange, a leading international telecom operator, also said in a results statement that it was pursuing "a policy of selective acquisitions by concentrating on markets in which it is already present."
The French telecom market is in turmoil following the emergence of Free as a national low-cost operator, largely thanks to a capacity contract with Orange which sparked a price war.
Orange has suffered from losing customers to competitors, but the half-year statement said that the fall of sales had slowed down and that signs of improvement in the first quarter had continued in the second quarter.
This was the case in its home market in France, but also in Belgium, Poland, and in services to businesses. Business was growing strongly in the Africa and Middle East region, it said.
The fall of sales in France slowed to 4.7 percent in the first half from a fall of 6.9 percent in the same period of last year.
But performance by the French mobile phone activities fell by 8.7 percent, and the number of French customers was steady at 27 million of whom two million subscribed to fourth-generation 4G high-speed services.
Underlying performance as measured by earnings before interest, tax, depreciation and amortisation was 6.1 billion euros in the first half in line with the group's forecasts.
The operating margin, a key measure of profitability, was about steady at 31.3 percent.
The price of shares in the group was slightly up by 0.04 percent to 11.815 euros in mid-morning trading.
The group said it had cut operating costs by 3.7 percent to 511 million euros, compensating for 70 percent of the fall in sales, and overall it was able to confirm its target for an underlying profit of 12.0-12.5 billion euros for the whole year.
"These results demonstrate the company's strength and ability to react in market conditions that continue to be very challenging." chief executive Stephane Richard said.
"We've maintained our commercial momentum, despite a hyper-competitive environment, largely due to the investments we've made in very high-speed broadband, fibre and 4G ... It is clear that consumers are not just focused on price but are also sensitive to quality and service."
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