France Telecom Issues Dividend Warning
France Telecom said on Thursday that it was cutting sharply its dividend for this year and next to defend its financial strength, and also reported a sales fall.
Revenues had dropped because of a fall of prices on the French and European markets for mobile phone services, the company said.
The French mobile market has been thrown into turmoil this year due to price-cutting by new operator Free.
France Telecom said that its dividend for 2012 and 2013 would be at least 0.80 euros per share, down from 1.40 euros in 2011.
Sales in the third quarter fell by 1.1 percent on a 12-month comparison to 10.7 billion euros.
Finance director Gervais Pellissier said in a telephone press conference that the firm was containing the dividend because of pressure on its cash position and because it wanted to protect its financial strength.
He said that a dividend of 0.80 euros per share remained "an extremely high return" of 9.0 percent on the basis of the share price late on Wednesday.
This was about twice the average yield of stocks on the leading French CAC 40 index, he said.
The firm said that group sales had been steady in the first half of the year but had fallen by 1.1 percent in the third quarter owing to a fall of mobile phone charges in France and in Europe.
"In line with 2012, the group will be confronted in 2013 by a more difficult environment than was expected initially," France Telecom said.
Source: Agence France Presse
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