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France’s Iliad’s profits jump as sales grow, adapts to energy costs

by jcp
Editorial & Advertiser disclosure

By Valentine Baldassari

(Reuters) -French telecoms firm Iliad reported higher half-year core earnings on Tuesday, driven by growth in the three countries in which it operates and the integration of Polish broadband operator UPC.

Iliad https://www.reuters.com/article/liberty-global-ma-iliad-idUSL8N2QO0NH, which billionaire Xavier Niel took private last year, said it was “keeping a vigilant eye” on market volatility and taking steps to reduce energy use, including making equipment more efficient and turning off certain frequency bands at night.

“We are faced with an unprecedented inflationary context on our supply costs and our energy costs, but I really have full confidence in (our) capacity for adaptation,” CEO Thomas Reynaud said.

Iliad posted core earnings (EBITDA) after leases, or long-term contracts, of 1.58 billion euros ($1.58 billion) in the first half of 2022, up nearly 13% on the year.

Its French revenue increased by 6.6% to 2.71 billion euros, while Italy saw growth of 15.4% to 442 million. Revenue in Poland, where Iliad bought UPC last year and mobile operator Play in 2020, rose 9.7%.

At a news conference, the company reiterated the group’s interest in buying an Italian peer should any competitors want to sell assets.

The group also said it had in April signed a network-sharing agreement for Italy’s non-densely populated areas with rival Wind Tre.

It added 187,000 new subscribers in France in the second quarter and 257,000 mobile customers in Italy.

“Overall Iliad is tracking commercially strongly at the expense of its major competitors in its major markets,” Credit Suisse analysts wrote in a note to clients.

“The strong trends in France broadband suggest that France’s fixed market is perhaps a bit more competitive than appreciated while Italy is likely to remain challenging for peers,” Credit Suisse added.

Iliad’s Free is one of France’s main mobile operators alongside Orange, SFR, and Bouygues Telecom. In Italy, it competes with Vodafone Italy and Telecom Italia.

($1 = 1.0001 euros)

(Reporting by Valentine Baldassari in Gdansk; editing by Milla Nissi and Barbara Lewis)

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