Key Highlights
- Orange shares climbed over 3% following strong first-half financial performance that exceeded market expectations
- The Africa and Middle East segment posted exceptional results, with second-quarter revenue surging 15% compared to last year
- The company upgraded its full-year EBITDAaL growth forecast to exceed 4%; organic cash flow projection increased to approximately €4.3 billion
- Reported net income reached €3.6 billion, significantly enhanced by a €2.4 billion gain from MasOrange transaction
- The telecom giant entered into a preliminary agreement with Bouygues Telecom and Free to purchase SFR together
Shares of Orange SA advanced more than 3% during Monday trading, reaching an intraday peak of €17.19 on the Paris exchange, following the release of first-half financial results that surpassed analyst projections and prompted the French telecommunications company to upgrade its full-year guidance for the second consecutive time this year.
The company reported first-half revenue of €20.95 billion, exceeding the consensus projection of €20.76 billion. EBITDAaL reached €6.13 billion, surpassing the analyst average of €6.11 billion.
The shares momentarily exceeded Morgan Stanley’s €16.50 valuation target. The investment bank kept its “equal-weight” stance, observing that robust performance in the Middle East and Africa region, combined with the improved guidance, were offsetting challenges in the Spanish market.
The Africa and Middle East territories emerged as the star performers. Regional revenue surged 13.9% during the six-month period, with the second quarter specifically showing a 15% year-over-year increase. The company attracted 10 million additional mobile data subscribers across these markets.
Management now anticipates full-year EBITDAaL expansion exceeding 4%, an upgrade from the previous projection of above 3%. The organic cash flow target was increased by 7.5% to approximately €4.3 billion — a figure Orange states is 4.2% higher than internal consensus estimates.
Performance Across European Markets
French operations produced a slight positive surprise, with second-quarter revenue growing 0.1% versus Morgan Stanley’s expectation of a 1% contraction. The investment bank observed that underlying first-half performance, excluding one-time wholesale impacts, remained flat and trailed the company’s full-year objectives.
The Spanish market represented a challenging area. MasOrange service revenue declined 2% while first-half EBITDAaL contracted 3%. Orange finalized the purchase of Lorca’s 50% ownership in MasOrange during June for €4.25 billion, securing complete operational control of the Spanish business. Management anticipates stronger performance during the latter half of the year.
Reported net income totaled €3.6 billion for the half-year period, representing a €3.7 billion year-over-year increase. This figure was substantially boosted by a €2.4 billion accounting benefit from the MasOrange consolidation and the reversal of a restructuring charge from the previous year. On an adjusted basis, net income grew 11.8% to €1.35 billion.
Net financial debt expanded to €35.7 billion from €22.5 billion at the conclusion of 2025, primarily due to the MasOrange transaction. The net debt-to-EBITDAaL leverage ratio increased to 2.4x. The company maintains a medium-term objective of reducing this metric to approximately 2x.
Strategic SFR Acquisition Agreement
On June 6, Orange disclosed that it had executed a memorandum of understanding with Bouygues Telecom and Free to jointly purchase SFR from Altice France. Orange’s portion of the total €20.35 billion enterprise valuation amounts to roughly 27%, representing approximately €5.6 billion.
The transaction would bring an estimated 4 million mobile subscribers and 1 million fixed broadband customers into the French portfolio. Regulatory clearance is necessary, with completion anticipated no earlier than the second half of 2027.
Additionally, Orange revealed a partnership with Morrison to establish data center facilities in France, aiming for 400 MW of total capacity, supported by a €3 billion capital investment program.
The board proposed a 2026 dividend of €0.79 per share, scheduled for distribution in 2027, pending shareholder ratification.
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