THE future for mobile phone group Orange was looking distinctly brighter last night as the company announced it has made a post-tax profit for the first time.

Interim results for the company, which has call centres in Darlington, Peterlee, County Durham, and North Tyneside, showed it made post-tax profits, before exceptional items, of £138m.

Chief executive Jean-Francois Pontal said the profit, for the six months to the end of June, was "another financial milestone" for the group.

The figure compares with losses of £316m last year and the profits come 18 months ahead of the group's forecast.

John Allwood, vice-president UK operations, said: "We are now starting to see the benefits coming through the accounts of all the hard work that's been put in over many years to build up the business."

He said Orange had more than 13m customers, adding: "Our services are improving and that follows through in the accounts. I think people are now encouraged and are using their phones more - and that's good news for us."

Writing down the value of its 26.6 per cent stake in Italian operator Wind by 1.1 billion euros (£696m) meant bottom-line figures were pushed into the red.

Losses came in at 862 million euros (£546m) against 500 million euro losses (£316m) last time.

The upbeat figures meant the group also raised its profits targets for this year.

It now expects earnings to come in ahead of previous forecasts and also expects the amount of funding it needs to be less than previously forecast. Mr Allwood said: "We're more positive about the business overall. One of the things we have to do is prove the sceptics wrong because there's a big question mark that the City and financial people put over anything to do with telecoms."

The figures also revealed that in the UK revenues rose 11.8 per cent and earnings jumped 56.3 per cent.

Orange added that the launch of third-generation (3G) mobile services was on track