Deutsche Telekom adds €200 million to core profit outlook

Deutsche Telekom adds €200 million to core profit outlook

Deutsche Telekom AG Timotheus Höttges.jpg

Deutsche Telekom has raised its profit outlook for the second time this year in is Q2 financial results.

Released today, the figures beat analyst expectations, despite USD currency fluctuations.

Adjusted core profit is now expected to reach €37.2 billion ($43.7 billion) this year, an increase of €200 million euros on the previous outlook. The guidance for free cash flow AL remains unchanged at more than €8 billion.

“Every area of the group saw an increase in results in the first half of the year, thus continuing the group’s growth story," CEO Tim Hoettges (pictured) said in a statement.

Over the quarter, organic revenue grew 6.8% to €26.6 billion while net profit "surged almost 150%" reaching €1.9 billion.

Across its international markets, T-Mobile strengthened US results through US customer additions while the broadband business in Germany "remains strong" and Europe as a whole noted "strong growth".

Elsewhere, reported group revenue declined by 1.7% in the quarter and adjusted EBITDA after leases declined by 4.2%, but after accounting for one-off factors such as exchange rate moves, they were up 6.8% and 1.1% respectively on an organic basis.

Segment by segment

In the European market, Deutsche Telekom saw its 14th consecutive quarter of growth. Revenue grew by 4% in organic terms compared with the prior-year period to €2.8 billion.

T-Mobile NL added 70,000 mobile contract customers in the second quarter alone. Revenue increased in this period by 2.7% in organic terms compared with the same period in 2020 to €506 million. The organic increase in adjusted EBITDA AL was even stronger, with growth of 3.6% to €155 million.

In Germany, mobile service revenues were up 2% against the prior-year period. The negative impact of coronavirus-induced measures on roaming and visitor revenues had been stronger in the prior-year quarter, giving rise to a positive net effect compared with the prior-year period. Adjusted for this effect as well as for regulatory effects, the increase totalled 1.4%.

In the cell tower business, revenue grew by 5.1% in organic terms to €283 million, while adjusted EBITDA AL grew by 8.8% year-on-year in the second quarter in organic terms to €170 million. The number of sites increased by 1,100 in a year on a like-for-like basis – i.e., adjusted for the sale of the Dutch towers and the inclusion of the Austrian towers – to 39,800.

T-Mobile US once again recorded stronger customer growth than its competitors in the second quarter of 2021. At the end of the reporting period, T-Mobile US’ customer base totalled 104.8 million, an increase of almost 6.5 million year-on-year.

Revenue at T-Mobile US increased by 5.4% in the second quarter compared with the same quarter of the prior year to $20.1 billion.

Also beating guidance, DT said the integration of Sprint is progressing faster than planned. T-Mobile US now expects synergies from the transaction to reach $2.9 to $3.1 billion in the current financial year. That is $100 million more than the company’s most recent guidance.


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