Orange announces an accounting adjustment of 3,700 million of its subsidiary in Spain




Surprise announcement in the presentation of the results of Orange corresponding to the second quarter of the year. Specifically, the operator has announced the realization of an accounting adjustment or ‘impairment’ of its Spanish subsidiary of 3.7 billion euros. Asked about this measure, the CEO of Orange Spain Jean François Fallancher explained that it is “an accounting decision” in which the book value of the assets has been evaluated “and the balance adjusted.” To do this, Fallacher added, “we take into account the direction that the Spanish market has taken in the last two years” for which he has used the term “hyper-competitiveness” in reference to low cost.

For his part, Fallancher has assured that «it has no impact on liquidity or investment capacity » and it has guaranteed that the teleco will continue to invest in fiber and 5G in Spain. As an example, you mentioned that in the 700 Mhz band – recently auctioned – Orange has invested 350 million euros to acquire 20 Mhz, although in the 3.5 GHz spectrum it already has an important part of the pie.

As far as results are concerned, Orange Spain has registered revenues of 2,368 million euros in the first half of the year, 5.1% less than a year ago. Besides, EBITDA after amortizations reached a total of 610 million in the semester, 16.2% less than in the same period of 2020 (in the last six months of 2020 it fell by 18%). In the same way, commercial activity begins to improve and the fall in income has been less in the first six months of the year: From 7.4% from January to March to 2.7% in the last quarter thanks to the evolution of the FTTH and mobile contract customers or equipment sales.

On 5G network, which is already available in 626 municipalities in 38 provinces including the autonomous cities of Ceuta and Melilla (one 37% of the Spanish population covered) seeks to reach more than half of the population in 2021. The operator plans to invest a total of 523 million in this technology in Spain.

Regarding the client portfolio, the operator already has more than 20 million customers as of June 30 of which 16,072,000 are from mobile services and 4,024,000 from fixed broadband. In addition, 3.43 million users already enjoy services over FTTH, while the 4G customer base reaches 10.59 million. For its part, Orange TV had 681,000 subscribers at the end of the semester.

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