France's biggest telecoms operator, Orange, said first-quarter core operating profit was hit by exceptional labour-related costs totalling close to 200 million euros ($225 million).
Restated earnings before interest, tax, depreciation and amortisation (EBITDA) fell 1.6 percent to 2.569 billion euros, the group said in a statement on Tuesday.
This was below the average estimate in a Reuters analyst poll of 2.708 billion euros, and followed two quarters of profit growth.
Excluding the impact of an employee shareholding programme, Orange said core operating profit grew 0.3 percent. That programme shaved 50 million euros off restated EBITDA, Chief Financial Officer Ramon Fernandez said on a conference call.
This cost came on top of a 40 million euro cash bonus distributed to employees over the period and a 113 million restructuring expense mainly related to a departure plan in Spain following the acquisition of Jazztel.
Orange confirmed its 2016 targets, including higher restated core earnings than in 2015 on a comparable basis. First-quarter revenue rose 0.6 percent to 10.01 billion euros.
Orange ended discussions earlier last month to buy Bouygues' telecoms unit, raising questions about what its next strategic move could be.
The former state monopoly, which draws about half of its revenue from its home country, aims to increase turnover, notably by pushing its expansion in Africa and offering new banking services after the acquisition of 65 percent of Groupama Banque in France.
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