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Orange hails 'outstanding' Q2 in Africa and Middle East

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The Africa and Middle East region remains a major growth driver for the France-based Orange group, with group CEO Stéphane Richard describing its performance as "outstanding" in the second quarter (Q2) of 2021.

Orange said Q2 revenue growth was double that of the first quarter.

"With the exception of the Central African Republic, all countries were up, including 13 which posted growth of more than 10% (out of 16 consolidated countries)," the group said in a statement.

Revenue in the region increased by 14.4% to €1.55 billion (US$1.84 billion) on a comparable basis in Q2. In the first six months of 2021, revenue increased by 10.7% to just over €3 billion ($3.57 billion), and earnings before interest, taxes, depreciation and amortization after leases (EBITDAaL) was 17% higher at €1.05 billion ($1.25 billion).

Orange noted that EBITDAaL grew faster than revenue for the sixth consecutive quarter.

Orange said the growth was driven by voice, mobile data, fixed broadband and Orange Money. The mobile customer base grew 7% year-on-year (YoY) to 132.2 million customers. The number of fixed broadband customers increased by 29.6% to 1.9 million customers.

Orange Money also continued on an upward trajectory. The customer base grew to 22.6 million active customers, a 15.4% increase YoY.

Looking ahead, Orange anticipates a compound annual revenue growth rate of around 6% from now to 2023 in the Africa and Middle East segment, with double-digit EBITDAaL growth and organic cash flow growth that will be faster than that of EBITDAaL.

Source: Orange results at June 30, 2021.
Source: Orange results at June 30, 2021.

Accelerated growth at group level

At group level, the operator reported a 2.6% increase in Q2 revenue to €10.55 billion ($12.55 billion) on a comparable basis. That followed a more moderate rise of 0.5% in first quarter (Q1) revenue, and a 0.2% drop in the fourth quarter of 2020.

Orange said growth was fueled in particular by equipment sales, which were up 18.4%, and IT and integration services, which rose 8.1%.

Group EBITDAaL was still in decline, falling by 0.4% to €3.27 billion ($3.89 billion). However, Richard said this represented a "near stabilization of EBITDAaL" following a 0.3% decline in Q1 and a 2.3% drop in Q4 last year.

In the first six months of the year, revenue increased by 1.5% on a comparable basis to €20.87 billion ($24.7 billion), while EBITDAaL was 0.4% lower at €5.83 billion ($6.9 billion).

However, the group posted a net loss of €2.6 billion ($3 billion), which it blamed on an operating loss of €1.75 billion ($2 billion). That in turn was owing to the recognition of a goodwill impairment in Spain of €3.7 billion ($4.4 billion).

The group also noted that capex rose by 22.8% in the first half, "driven by investments in fiber and in Africa and Middle East, in line with the objectives for 2021".

*Top image is of Orange group CEO Stéphane Richard (Source: Orange).

— Anne Morris, contributing editor, special to Connecting Africa

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