For the year to December 31, it reported a net loss of 20.7bn euros ($22.7bn) compared with a 2001 net loss of 8.3bn euros ($9bn), on revenue of 46.6bn euros ($51.1bn) up from 43bn euros ($47.1bn) in 2001. Net income before tax, amortization and exceptional provisions was 2.2bn euros ($2.4bn). Goodwill amortization and exceptional provisions came to 18.3bn euros ($20bn).

Earnings before interest, tax, depreciation and amortization, a closely watched benchmark of operating performance for heavily indebted companies like France Telecom, rose to 14.9bn euros ($16.2bn), up from 12.3bn euros ($13.4bn) in 2001.

The write-downs included 8.9bn euros ($9.7bn) for German mobile phone operator Mobilcom and British cable operator NTL, 4.4bn euros ($4.7bn) for telecoms carrier Equant NV, and 1.6bn euros ($1.7bn) for Italian venture Wind SpA. Another 900m euros ($981m) was written off against Orange Switzerland, the Swiss offshoot of France Telecom’s mobile phone company, Orange SA, which also reported its results today (see separate report).

France Telecom is one of Europe’s most heavily indebted companies, with a debt burden of 68bn euros ($74.6bn). During the past year alone, it has had to cough up an interest charge of 4bn euros ($4.3bn) to service its debt.

The debt pile was run up after a reckless acquisition spree by the then CEO and chairman Michel Bon. The spending spree was only possible because the company’s continued existence was guaranteed by the French state, which still owns 56% of it.

In September 2002, Bon quit and was replaced by turnaround specialist Thierry Breton. He has already announced job cuts of 7,500 in France this year, and last month won approval for a mammoth share issue of up to 30bn euros ($32.3bn) to bring its debt pile down to manageable proportions. Breton has stated that he is on target to reduce borrowings to below 40bn euros ($43.8bn) by the end of 2005.

Meanwhile, France Telecom said it is sticking to its target of boosting revenue this year by between 3% and 5%. It also said it is aiming for double-digit growth in both EBITDA and operating profit.

Source: Computerwire