Orange cuts dividend as COVID-19 bites

Orange became the latest operator to show signs of tightening its belt amid growing business uncertainty caused by the effects of COVID-19.

The France-based operator said it will propose a reduction in its planned 2019 dividend from €0.70 to €0.50 (US$0.76 to $0.54) per share, although the date of payment remains unchanged at June 4, 2020. That means the unpaid balance of €0.40 (US$0.43) per share will be reduced to €0.20 (US$0.22).

The company warned it will be reviewing its intention to distribute a dividend of €0.70 per share for 2020-2023 "at a later date in light of the evolving situation." Orange also confirmed it will hold its annual general meeting behind closed doors on May 19, 2020, without the physical presence of shareholders.

Stéphane Richard, CEO of the Orange Group, was keen to emphasize that the operator did not expect "a significant deviation from its 2020 objectives," but he said it is closely monitoring the situation and its developments.

"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," Richard said. "Beyond this, the collective commitment of our employees, the solidity of our financial situation and the relevance of our strategic action plans will allow Orange to face up to this unprecedented crisis."

Richard's comments echo the general sense that although telecoms will not emerge unscathed from the crisis, the high demand for communications services has heightened the sector's relevance in people's lives. Indeed, a recent report from Analysys Mason indicated that telecoms would perform ahead of GDP trends, although revenue is expected to fall this year.

Orange's domestic market has been in lockdown since March 17 due to the spread of COVID-19. The most recent update from President Macron indicated that the strict measures will continue until at least May 11. At the time of reporting, France was ranked fourth in the world in terms of confirmed cases of COVID-19, with a total of 147,101 cases. Total deaths in mainland France are nearing 18,000.

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— Anne Morris, Contributing Editor, Light Reading

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