By Diana Mandia
(Reuters) -French telecoms operator Orange reported on Wednesday a drop in first-quarter fixed broadband customers in its home market, knocking its shares despite meeting core operating profit expectations on growth in Africa and the Middle East.
The shares were down 2.4% at 0932 GMT, compared with a 0.2% rise for Europe’s STOXX 600 index and a 0.15% increase for France’s blue-chip index CAC 40.
Orange lost a net 43,000 fixed broadband customers in France during the quarter, it said in a statement.
“We see, indeed, an overall decrease on the French market, certainly due to the fact that we are post-COVID,” Jean-François Fallacher, Orange France’s CEO, said in a call with analysts, as demand for broadband services fades after the pandemic led many people to work from home.
He said the slowdown was also explained by pressure on household budgets.
Orange recently reduced the duration of promotions from 12 to six months in France, where the group competes with broadband provider Free, among others.
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However, Orange’s revenues in France returned to growth and reached 4.34 billion euros in the quarter, mainly boosted by growth in retail services. The last time it saw growth in France was in the final quarter of 2022.
Africa and the Middle East, the main contributor to growth in the quarter, saw revenue increase by 11.1% to 1.85 billion euros, also boosted by retail services.
Orange’s earnings before interest, tax, depreciation and amortisation after leases (EBITDAaL) rose 2.3% to 2.41 billion euros in the three first months of the year, compared with a forecast of 2.40 billion euros in a company-compiled poll.
These numbers exclude Orange Spain, after the group completed the merger of its Spanish operations with Masmovil in March.
($1 = 0.9342 euros)
(Reporting by Diana Mandiá; Editing by Sherry Jacob-Phillips and Mark Potter)
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