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France Telecom 2008 earnings dip 34% to $5.7 billion

UK revenue fell 15% to $1.7 billion

By CBR Staff Writer

France Telecom has reported a 34% decline in net income in 2008 to E4.49 billion ($5.66 billion) compared to E6.81 billion ($8.58 billion) in the year-ago quarter, on revenue up 1% at E53.48 billion ($67.4 billion).

Operating income fell 5% to E10.27 billion ($12.94 billion), while diluted EPS fell 35% to E1.54 ($1.94).

It said revenue increased 1% to E13.63 billion ($17.18 billion) in the fourth quarter, compared to E13.53 billion ($17.05 billion) a year ago. Personal communication services revenue grew marginally to E7.49 billion ($9.44 billion), home communication services revenue grew 1% to E5.86 billion ($7.38 billion), and enterprise communication services revenue grew 1.5% to E2.03 billion ($2.55 billion).

Geographically, personal communication services revenue from France grew 5% to E2.74 billion ($3.54 billion), while UK revenue fell 15% to E1.35 billion ($1.7 billion), Poland revenue grew 1% to E586m ($739m), and Spain revenue grew 1% to E819m ($1.03 billion). Revenue from the rest of the world rose 7% to E2.01 billion ($2.5 billion).

For home communication services, France revenue declined 1% to E4.61 billion ($5.81 billion), while Poland revenue declined 5% to E703m ($886m). Rest of the world revenue grew 24% to E646m ($814.5m).

Didier Lombard, chairman and chief executive at France Telecom, said: The group performed well in 2008, confirming the success of the NExT plan launched three years ago. We now have more than 182 million customers worldwide, 70% of whom are with the Orange brand. For the second consecutive year, we stabilized the gross operating margin rate. Finally, a dividend of E1.40 ($1.76) was proposed to the board of directors.

For fiscal 2009 it expects to generate E8 billion ($10.08 billion) in cash flow and maintain investment at about 12% to 13% of revenue.

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