Paris - French telecommunications giant France Telecom said on Wednesday that its profits for the year 2008 fell by 35.4 per cent over 2007, to 4.07 billion euros (5.1 billion dollars).

The reasons for the downturn was a decline of 527 million euros in operating income, an increase of 337 million euros in expenses due to one-time items and a jump of 1.5 billion euros in corporate taxes, the company said in a press statement.

Turnover for the year was up 1 per cent, to 53.49 billion euros, over the previous year. The figure includes the negative impact of exchange rates, which totalled 670 million euros.

Earnings per share fell to 1.56 euros from 2.42 euros in 2007.

At year's end, France Telecom counted 182.3 million customers worldwide, up 7 per cent over one year earlier, with
70 per cent of them with the company's Orange brand.

France Telecom head Didier Lombard said, "The group performed well in 2008.... These results show that the Group is well armed to face an economic environment that has been particularly unsettled."

Lombard said the economic downturn could force the company to reduce its investments from the intended 12 to 13 per cent of turnover this year.

"Nonetheless, we remain confident of our ability to maintain growth at a rate that exceeds that of the economies of countries where we operate," he said.

On the results, France Telecom shares were up 1 per cent, to 17.59 euros, in early trading on the Paris Bourse. (dpa)