Telefonica Deutschland and KPN post Q2 growth

Financial results NEW .jpg

Telefonica Deutschland has raised its outlook for revenue and core profit this year after posting record first-half growth.

Q2 revenue increased by 5.7% to reach €1.9 billion, driving growth in adjusted core profit of 10.8% to €612 million. The results are the strongest H1 growth since the company was formed from a merger with E-Plus in 2015.

"We developed very well in the first half of the year and achieved record growth in revenue and operating profits," said CEO Markus Haas.

Mobile service revenues increased 7.4% to €1.4 billion driven by strong own brand performance with O2 postpaid ARPU returning to growth in Q2 and a solid partner performance as well as non-recurrent special factors

Highlights for the quarter included the reopening of retail outlets and turning on the O2 5G network across 80 cities enabled by around 2,000 antennas, mostly on 3.6 GHz spectrum band.

Net additions for mobile post-paid were more than double the figure for Q2 last year at 374,000 and pre-paid saw 91,000 additions.

Mobile customers grew to 45 million, an increase of 3.4% year on year, and the LTE customer base jumped to 30.8 million as of 30 June 2021.

The fixed broadband customer base was up 0.4% year on year to 2.3 million at the end of H1, with the VDSL base posting strong growth of 5.1% year on year to reach 1.8 million.

However, handset revenues declined 1.2% to €318 million.

Telefonica Deutschland has set a target of growing revenue by a cumulative 5% between 2020 and 2022, Haas saying this was "fully on course".

In the Netherlands, KPN has confirmed it is on track to reach full-year outlook after reporting mass-market service revenue growth in Q2.

CEO Joost Farwerck said it was "an important proof point of the success of our strategy and a first step towards sustainable top-line growth for the group, which showed slight growth as well this quarter."

In wholesale, KPN has seen strong performance thanks to its open wholesale access policy and several renewed broadband and MVNO agreements.

The firm posted mobile service revenue growth in the consumer segment for the first time since Q1 2017.

Other highlights over the quarter included passing the three million household milestone for fiber installation and bolting on 22,000 broadband net adds following the acquisition of Oxxio. A further 1,000 customers were also added over the period, taking total net adds to 23,000.

Farwerck commented: "Today, almost half of all Dutch households have a fiber connection; the vast majority via KPN. Thanks to the Glaspoort JV, which is now operational, we will be able to further accelerate our ambition and commit to jointly covering approximately 80% of the Netherlands with fibre by the end of 2026.

"Our mobile network has once again been recognised as the best in the Netherlands with best coverage and fastest 5G. For the first time in four years we’ve seen growth in Consumer mobile service revenues, supported by the strong commercial performance of our Unlimited data proposition. Total mobile net adds in Consumer and Business continued to grow strongly," Farwerck continued.

KPN intends to buy back shares worth €200 million this year.