Orange raises profit, cash flow targets on Africa growth

By Leo Marchandon

July 28 (Reuters) - French telecoms group Orange raised its profit and cash-flow targets on Tuesday after strong growth in Africa and the Middle East helped offset weakness in its mature European markets.

Orange now expects its earnings before interest, taxes, depreciation and amortization after leases (EBITDAaL) to grow more than 4% this year, instead of the previously expected over 3%. It had already lifted the outlook in April following a stronger-than-expected first quarter. It also raised its organic cash flow target to around 4.3 billion euros from around 4 billion euros.

The upgraded outlook underscores how Orange's faster-growing African and Middle Eastern operations are funding earnings growth while its core French market remains broadly flat on an underlying basis.

Investors are watching whether improving customer loyalty and spending can help Orange defend prices in France ahead of a proposed break-up of rival SFR that could eventually reshape the country's fiercely competitive telecoms market.

Orange reported half-year revenue of €20.95 billion ($23.82 billion), beating a company-compiled analyst consensus of €20.76 billion. First-half EBITDAaL rose to €6.13 billion, broadly in line with a market forecast of €6.11 billion. In Africa and the Middle East, revenue rose 13.9% and EBITDAaL increased 16.1%.

In France, Orange pointed to lower customer churn and modest gains in revenue per customer, suggesting that its pricing strategy is helping it defend profitability in a market long marked by intense competition and promotional activity.

Capital expenditure rose 2.7% to €3.18 billion, slightly above the €3.10 billion expected by analysts.

Net financial debt rose to €35.68 billion as of June 30, from €22.53 billion at the end of 2025, mainly reflecting Orange's acquisition of the remaining 50% of its Spain-based MasOrange venture.

($1 = 0.8797 euros)

(Reporting by Leo Marchandon in Gdansk; Editing by Matt Scuffham and Milla Nissi-Prussak)