For the current year, the manager has set a slightly higher target for operating profit.
(Photo: IMAGO/Panama Pictures)
Hamburg Stagnating sales, falling free cash flow, but record profits: Deutsche Telekom reported mixed business figures for the first quarter of the current year on Thursday morning. Group sales remained largely stable in the months from January to March (up 0.3 percent) at EUR 27.8 billion. The service revenues, which are particularly relevant in the industry, increased by 3.5 percent to 22.8 billion euros.
A special effect came into play when it came to profit. The partial sale of the radio tower business, which was sealed last summer, now also had an effect on the result. The US investors Digitalbridge and Brookfield paid more than ten billion euros for their majority stake in Deutsche Funkturm in February.
Also thanks to other special effects, the consolidated net profit rose to around 15.4 billion euros, which corresponds to almost a fourfold increase compared to the same quarter of the previous year. “Now our figures show how the Funkturm transaction created value for Deutsche Telekom,” said CEO Timotheus Höttges. Without this one-off effect, net profit slipped by 12.5 percent to almost two billion euros due to the changed interest rate environment.
The funds raised in the course of the transaction also flowed directly into the reduction of the record debt. Overall, net liabilities fell by 1.8 percent year-on-year to EUR 133.5 billion. That was around nine billion euros less than at the end of 2022. Nevertheless, Telekom is still above the maximum target it had set itself.
The most important part of the group, the US subsidiary T-Mobile, continued to win over new customers. With 1.3 million new contract customers, T-Mobile recorded an increase on the previous year’s level.
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In Germany, after deducting terminations, Deutsche Telekom won 274,000 new mobile phone customers and thus fewer than its competitor Telefónica Deutschland (O2), which had won almost 370,000 people. Vodafone will present the numbers next week.
For the current year, however, CEO Höttges has set a slightly higher target for operating profit. Earnings before interest, taxes, depreciation and amortization including leasing costs (Ebitda AL) adjusted for special effects should rise to around 40.9 billion euros, previously around 40.8 billion euros were expected.
The free cash flow after leasing costs, which is particularly relevant for the dividend, fell in the first quarter by 5.3 percent year-on-year to 3.6 billion euros. However, Telekom still sees itself as “on schedule” for the year as a whole. Telekom shares rose by a good one percent to EUR 21.50 on Thursday morning.
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