Profits fall but mobiles rise at France Telecom

10th February 2005, Comments 0 comments

PARIS, Feb 10 (AFP) - France Telecom issued mixed signals on Thursday, reporting a net profit fall, a surge of mobile telephone services and a big dividend increase that disappointed analysts.

PARIS, Feb 10 (AFP) - France Telecom issued mixed signals on Thursday, reporting a net profit fall, a surge of mobile telephone services and a big dividend increase that disappointed analysts.

Net profit fell by 13.2 percent to EUR 2.8 billion from EUR 3.2 billion in 2003.

Debt, the main cause of a crisis that brought the company to its knees three years ago, fell in 2004 to EUR 43.9 billion from EUR 44.2 billion at the end of 2003. However, the company did not give a figure for debt this year.

The board said that it was proposing doubling the dividend EUR 0.48 per share from EUR 0.25 in 2003 but this fell short of market expectations and the share slipped.

The group made reported an operating profit of EUR 18.3 billion in 2004, an increase of 5.5 percent from the figure for of EUR 17.3 billion in 2003. Sales rose by 2.2 percent to EUR 47.2 billion, or by 4.1 percent on a comparable asset base.

Sales had been pulled ahead by mobile telephone services and the success of broadband connections.

The group had to be helped out of a debt mountain three years ago, said to have been the biggest for any company in the world. But throughout the difficult times it had been increasing operating profits.

On Thursday it reported that was "in good shape to pursue its development". It expected sales to grow by three to five percent this year and operating profit to total EUR 19 billion.

The mobile telephone business Orange had raised sales by 9.6 percent in 2004 to EUR 19.67 billion, attracting 5.4 million new customers in 2004 taking the total to EUR 54 million.

These operations had made an operating profit before writedowns of EUR 7.51 billion, an increase of 14.2 percent.

Sales by the Internet division Wanadoo rose by 9.1 percent to EUR 2.85 billion but operating profit fell by 5.9 percent to EUR 327 million.

France Telecom said that the proposed dividend was a balance between the priority of reducing debt and a desire to raise the payout.

The price of shares in the group was showing a fall of 1.53 percent to EUR 24.43.

Most analysts had expected a higher dividend of EUR 0.50-0.55 and at Global Equities, analyst Laurent Balcon said that "the main disappointment comes from the announcement of a dividend of 48 cents".

© AFP

Subject: French News

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