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Investing.com -- Proximus NV (EBR:PROX) shares tumbled 10% Friday after the Belgian telecoms group delivered mixed second-quarter results, with strength in its Domestic business offset by a steep decline in Global operations.
Group revenue fell 5.6% year-on-year to €1.544 billion, missing consensus expectations by over 6%, largely due to a 19% drop in Global revenue.
Domestic revenue was more resilient, down just 0.7% to €1.192 billion, while Domestic EBITDA rose 1.9% to €446 million, beating forecasts.
In contrast, Global EBITDA came in 12% below expectations, declining to €45 million as growth in digital communication platforms fell short.
As a result, Proximus slashed its 2025 guidance for Global EBITDA to a 5–10% decline from the previous target of 20% growth. UBS analysts note that the trend “may have been weaker than expected and top-line/direct margin synergies are now more back-end loaded.”
Meanwhile, the Domestic business remains a bright spot. The company upgraded its 2025 Domestic EBITDA guidance from “broadly stable” to up to +2% growth, citing cost efficiencies and service revenue expansion.
UBS highlights the Wallonia fixed-line cooperation deal with Orange Belgium as a structural positive that could drive long-term capex savings and boost network utilization.
Free cash flow (FCF) guidance for 2025 was maintained at €58 million. Capex guidance also remains unchanged at approximately €1.3 billion.
UBS analysts maintain a Neutral rating on the stock with a €7.80 price target, noting that while Proximus appears inexpensive, “there is limited FCF generation near term.”
The dividend yield of 7.4% stands out in the sector, but with a new CEO arriving in September, UBS sees increased uncertainty around the payout given it’s not currently covered by organic FCF.
"Proximus shares are up >60% YTD driven by Digi’s impact being lower-than-expected but we think the shares may be more volatile near term amid mixed catalysts," UBS analysts said.