ORA Orange.

By William Horobin and Nick Kostov

PARIS--France's largest telecoms company Orange SA (ORA.FR) on Thursday said it will raise its 2017 dividend as it reported a rise in 2016 net profit, boosted by an acceleration in revenue growth at the end of the year.

Net profit rose to 2.94 billion euros ($3.10 billion) in 2016 from EUR2.65 billion a year earlier, Orange said Thursday. Sales rose to EUR40.92 billion from EUR40.24 billion, led by improvements in Europe and particularly Spain at the end of the year.

Adjusted earnings before interest, taxes, depreciation and amortization--a measure closely watched by analysts--rose 2.1% to EUR12.68 billion, above the average analyst forecast of EUR12.65 billion.

"The confirmation of an improving trend allows us to consider a redistribution of the value created," said Chief Executive Stephane Richard.

Orange said it will propose a EUR0.65 a share dividend for 2017, a five euro cent increase from 2016. The company said it targets an increase in adjusted Ebitda in 2017.

Chief financial officer Ramon Fernandez said the rise in earnings is the first since 2008. Orange has faced fierce competition in many of its markets, particularly Europe, where telecom companies are competing hard for market share by cutting prices for mobile and broadband services. It failed in a bid to buy Bouygues Telecom SA for about EUR10 billion last year, denying the French market the consolidation that many telecoms executives have been clamouring for.

Mr. Fernandez said France's telecoms companies remain in contact, but not everyone is open to discussions on consolidation in the sector.

"You can see from our results that we don't need consolidation. But we've always said that the day it comes, and it will come one day, [...] it will create value for everyone," Mr. Fernandez said. "Nobody forbids themselves from thinking about it."

-Write to William Horobin at william.horobin@wsj.com

(END) Dow Jones Newswires

February 23, 2017 02:07 ET (07:07 GMT)

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