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20 February 2013
France Telecom’s net profit plummeted from €3.8 billion in 2011, to €820 million last year in part due to a €1.84 billion impairment charge in three international markets.
The French operator faced the
charge on goodwill and assets in 2012 for its operations in
Poland, Egypt and Romania.
"We’ve seen risks intensify in some of our
geographies, so we took impairment charges to comply with
accounting rules," said Gervais Pellissier, finance director at
Further, the arrival of low-cost, domestic rival, Iliad, owned
by entrepreneur and billionaire Xavier Niel, has forced France
Telecom to cut its prices as Iliad secured
5.4% of the mobile market last year.
Sales fell 3% from €44.7 billion to €43.5 billion in
2012 and operating income almost halved, but the company said
that operating cash flow for 2013 will be €1 billion less
than in 2012.
"We’re confirming our operating cash flow will
stabilise or rebound in 2014 on the back of better revenue
outside of France and cost cuts in France," Pellissier
government is rumoured to be looking to replace France
Telecom’s current CEO, Stéphane
Richard, this year.