Deutsche Telekom claims “very successful quarter”, but numbers mixed

Deutsche Telekom claims “very successful quarter”, but numbers mixed

06 NOV 2014

Deutsche Telekom (DT) said in its Q3 results that “all strategy related trends are clearly on an upward trajectory”, noting “an excellent performance in the German mobile market, record customer additions in the US, strong financial development in Europe and improvements in Systems Solutions”.

On the flip side, higher market investments in Germany and the US had a “noticeable effect” on earnings. “The challenges vary regionally, but we are clearly making progress everywhere,” said Tim Hoettges, CEO.

Net profit of €506 million for the quarter was down 13.9 per cent year-on-year, on revenue of €14.65 billion, up 0.8 per cent. It also said that, for the first time in its history, more than 60 per cent of revenue was generated overseas.

It noted that the proceeds from the sale of its Bulgarian subsidiaries had been posted in the prior-year quarter.

In a statement, DT said it had “substantially increased capital expenditure once again”, with Q3 cash capex (excluding spectrum costs) up 10.3 per cent to €2.5 billion.

For its core German operation, the company noted that EBITDA had decreased by 2.1 per cent to €2.32 billion, on revenue which decreased 1.5 per cent to €5.59 billion.

But the company noted that its mobile customer base increased “significantly” during the quarter, winning 432,000 lucrative new contract customers. This was “attributable to Telekom’s multi-award winning network”, where LTE coverage has now grown to 79 per cent of the population.

For the US, EBITDA decreased by 14.7 per cent to €869 million, on revenue which increased 8.7 per cent to €5.6 billion. While it is seeing strong subscriber growth thanks to its ‘Uncarrier’ strategy, this is accompanied by higher customer acquisition expenses.

T-Mobile US “wants to maintain the momentum in customer acquisition again in the fourth quarter,” the parent company said.

And in Europe, EBITDA decreased 10.1 per cent to €1.1 billion, on revenue which decreased 3.6 per cent to €3.3 billion.

Deutsche Telekom noted that “the key financial indicators of the European national companies are showing strong development”. There are signs of stabilisation, with the revenue decline “almost entirely attributable to regulatory decisions relating to mobile communications”.

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