Telekom makes 80 percent more profit thanks to US subsidiary T-Mobile US

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The US business contributes the largest part to the growth of the entire group.

(Photo: Bloomberg)

Munich Deutsche Telekom’s winning streak continued in the most recent quarter. The group announced on Thursday that sales and the number of customers are increasing. The growth driver is the successful subsidiary T-Mobile US.

As announced, the shareholders will also benefit from the successes: the dividend for the 2022 financial year will rise to 70 cents, it said. An increase of 9.3 percent.

Group boss Timotheus Höttges said: “Our business continues to grow. We are therefore in a position not only to raise our forecast for the current year for the third time, but also to increase our dividend.”

According to Deutsche Telekom, consolidated sales rose by 8.8 percent to EUR 29 billion in the third quarter just ended. The service revenues, which are particularly relevant in the industry, increased by 12.5 percent to 23.6 billion euros.

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The net result even grew by 80 percent to 2.4 billion euros. Due to exchange rate effects and high investments in the expansion of the 5G network in the USA, the level of debt also set new records: net financial liabilities rose by 16.4 percent to around 152 billion euros.

Telekom is now targeting an operating profit of more than 37 billion euros for 2022. Net earnings are expected to be more than EUR 1.50 per share. So far, the group had calculated here at 1.25 euros.

Sales in Europe are declining

Telekom is benefiting from the recent turmoil in the markets due to the strong US dollar. If you calculate this effect, the total and service sales would have increased by only 0.5 and 3.4 percent, respectively, and the operating result by only 0.7 percent, it said.

The net profit was also positively influenced by the financial result. Profit before tax fell by 5.4 percent to around 3.2 billion euros in the third quarter.

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Thriving US business drives growth. The subsidiary T-Mobile US was able to gain 854,000 customers in the third quarter, more than twice as many as the parent company. T-Mobile also raised its full-year targets at the end of October.

Things are looking bleaker in Europe. Here Telekom recorded a minus of 1.1 percent in sales. The operating result in the US business increased by 15.9 percent, while it shrank by 5.3 percent in Europe, the group announced.

The IT services business, which has been in crisis for years, has meanwhile been able to reduce its losses by around 50 percent. T-Systems only posted a loss of 20 million euros in the third quarter. At the beginning of the week, Telekom announced that it would relieve the IT subsidiary of old liabilities and want to integrate parts of the business into the parent company.

More: T-Mobile increases forecast and wins many new customers – most valuable mobile company in the world

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