France Telecom first half net profit up 45 pct

PARIS — France Telecom SA said Thursday that first half net profit rose 45 percent due to a one-off gain, although revenue and margins were eroded by regulatory costs and competition in the home market in France.

Net profit in the six months to the end of June rose to euro3.72 billion ($4.83 billion) from euro2.56 billion a year ago, the former telecom monopoly said.

The company, whose largest shareholder is still the French state, said it made over euro1 billion in the first half by selling assets of its Orange brand in Britain, related to the creation of the Everything Everywhere joint venture with T-Mobile.

Revenue fell 1.2 percent to euro22.14 billion, and the profit margin fell 0.9 points to 35 percent in the period. The profit margin is based on the earnings before interest, tax, depreciation and amortization, or EBITDA.

New CEO Stephane Richard, who earlier this month laid out plans to make 5 percent of the global population clients of his Orange brand by 2015, said in a statement that the company is "adapting to these challenging times" and the margin figure is in line with annual objectives.

He sought to win over shareholders with a three year dividend guarantee of euro1.40 per share.

Looking ahead, the company, which outside of its fixed line services markets itself under its Orange brand, said that regulatory measures would cost about euro1 billion in 2010.

Excluding regulatory effects, the company said that revenue should be roughly stable this year.

In the second quarter, the EBITDA profit fell 2.6 percent to euro3.98 billion in the three months to June from euro4.08 billion a year ago.

Revenue was down 0.4 percent at euro11.18 billion.

The company statement didn't provide a net, or bottom-line, figure for the quarter.