By Mathieu Rosemain

PARIS (Reuters). Orange, France’s largest telecoms operator expects core profit growth to return in 2022, after lower earnings from co-financing agreements and increased competition on the Spanish market. Earnings were down last year.

The former state-controlled monopoly is struggling to keep strong upward momentum in revenues, being caught between the necessity to upgrade networks and fighting with competition on a fragmented European market for telecoms services.

Orange projects earnings before interest tax, depreciation, amortization, and amortisation (EBITDAaL), to increase by between 2.5% and 3% in 2022 and 0.5% in 2021.

The company also anticipates that cash flow from telecoms will be greater than 2.9 Billion Euros, which is an increase from last year’s 2.4 Billion.

In 2021, revenues rose 0.8% to 42.5 million euros from the previous year.

Orange is ready for a major governance overhaul as Christel Heydemann (its new chief executive officer) will take control on April 4. This follows a 12 year tenure under Stephane Richard.

Richard was convicted by a court of being complicit in the misuse of public money and his departure was immediate. Richard refutes any wrongdoing.

Heydemann, who is experiencing a poor stock performance compared to peers, will assume the reins as the group seeks to turnaround the Spanish division. Also, amid high expectations from the market for mobile towers deals, Heydemann will be the new CEO.

Ramon Fernandez, Orange’s Chief Financial Officer, stated that Orange’s Totem division (which includes approximately 26,000 tower locations in France and Spain) was well-positioned in case any deals were to be made this year.

In 2023, he confirmed that Spain would be its second-largest market, after France.

Orange retained its dividend policy at 0.70 Euro per share for 2022, and has confirmed that there will be an organic cash flow of at least 3.55 billion euro from telecom operations next year.

($1 = 0.8807 euros)