Orange: The action falls, concerns about the results of the Business activity in the second quarter

Orange: The action falls, concerns about the results of the Business activity in the second quarter

PARIS (Reuters) – Orange SA shares fell sharply on Thursday on investor concerns about its business services division, whose profits slumped in the first half of the year.

The group’s share fell 2.58% at 10:50 a.m., one of the biggest drops in the CAC 40 index, after having nevertheless published results broadly in line with market expectations in the second quarter.

The group said its Enterprise division’s EBITDAaL plunged more than 25% in the first half from a year earlier, fueling concerns over its ability to meet full-year profit targets, whether the group nevertheless confirmed.

“They are a bit behind their forecast for the year in terms of EBITDAaL, which may be a source of concern about their ability to reach the annual target,” said Stéphane Beyazian, analyst at Oddo BHF. .

Core operating profit (EBITDAaL) increased by 0.5% to 3.31 billion euros in the second quarter compared to the previous year. Orange has confirmed its growth target of between 2.5% and 3% in this area.

Orange is struggling to return to growth in its two largest markets, France and Spain, where competition is fierce and where it must make high investments in fiber.

The group’s Spanish business has been weighing on profits for some time. Orange is counting on improved results in Spain from next year, which could be helped by the merger of its activities in the country with those of MasMovil for an amount of 18.6 billion euros.

The new CEO, Christel Heydemann, will present a new strategic plan in February 2023.

(Written by Jean-Michel Bélot, with contributions from Mathieu Rosemain, edited by Nicolas Delame and Sophie Louet)

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