PARIS (AFP) – Telecommunications group Orange said yesterday it was maintaining its financial outlook for 2020 but reducing dividend payments for 2019 given the un-certainty linked to the coronavirus outbreak.
“Taking into account the uncertainty caused by this exceptional crisis, the Board of Directors has proposed a decrease in the 2019 dividend from EUR0.70 to EUR0.50 per share,” said the major operator of mobile and Internet services in Europe and Africa.
Many firms are reducing their disburse-ments of profits to shareholders to hold on to cash and ensure their operations are not at risk in case of a payments or credit crunch.
“Our decision to reduce the dividend was taken solely out of an abundance of caution in a situation where uncertainty and volatility are considerable,” said Chief Financial Officer Ramon Fernandez in a conference call.
Orange CEO Stephane Richard said the firm doesn’t expect performance to be much different from its targets.
“The important role played by the telecoms sector during this crisis to ensure the continued functioning of our economy and society as a whole confirms the strategic character of our activities,” he said in a statement.
For 2020, the company expects its measure of operating profit to be stable or higher than the EUR12.9 billion (USD14 billion) recorded last year. Positive cash flow is expected to remain above EUR2.3 billion.
Orange recorded a net profit of EUR3 billion last year on EUR42 billion in revenue.