France Telecom reports profit boom, job slashing

14th February 2006, Comments 0 comments

PARIS, Feb 14, 2006 (AFP) - France Telecom reported on Tuesday that net profit last year had surged by 89.2 percent to EUR 5.7 billion but also warned that it would slash 17,000 jobs in the next three years.

PARIS, Feb 14, 2006 (AFP) - France Telecom reported on Tuesday that net profit last year had surged by 89.2 percent to EUR 5.7 billion but also warned that it would slash 17,000 jobs in the next three years.

France Telecom, which was the subject of a government-orchestrated rescue after the high-tech bubble burst, also said that it would raise its dividend this year in respect of performance in 2005 by 108 percent to EUR 1, rising to EUR 1.2 the following year.

In following years, the company would make a "strong" increase in the dividend distribution, saying that the target was to distribute 40 to 45 percent of disposable cash.

Sales in 2005 had risen by 6.2 percent to EUR 49.038 billion and by 2.5 percent on a comparable basis.

Finance director Gervais Pelissier said that France Telecom would reduce the number of people it employed throughout the world between now and the end of 2008 by 17,000 people without forced redundancies.

This was a continuation of a policy of reducing staff by natural processes, he said. In France, 22,000 people would leave the company and 6,000 people would be taken on, he said. The workforce outside France would be reduced by 1,000. Overall, the reductions amounted to 8-10 percent of the workforce.

The company said that it stood by its target of reducing the ratio of net debt to gross operating margin to less than 2 by the end of 2008. In 2005 it had achieved its target of reducing this ratio to 2.48. The target had been 2.50.

Heavy debt had been the main cause of problems facing the company after the Internet and high-tech bubble burst, although its operating performance throughout that period had remained strong.

Copyright AFP

Subject: French news

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