Ricke cuts debt and pushes DT into profit

10 Mar 2004

Kai-Uwe Ricke’s first full year in charge of Deutsche Telekom (DT) has seen the incumbent generate a profit of EUR1.25 billion, compared to the EUR24.6 billion loss posted in 2002, despite reporting a loss in the fourth quarter. In the twelve months to the end of December 2003 DT met analysts’ expectations with EBITDA of EUR18.3 billion, thanks in part to a strong performance by T-Mobile International – which oversees the burgeoning cellco T-Mobile USA – where EBITDA rose 40% in the fourth quarter alone; DT added 7.6 million new mobile customers across all of its operations in 2003. Ricke has overseen a drastic cost cutting operation since taking the helm and DT ended last year with net debt of EUR46.6 billion, down from EUR61 billion the year before and ahead of the chief executive’s own target.

However, the group’s fourth quarter loss widened from EUR77 million to EUR364 million, due to a special EUR442 million charge relating to DT’s involvement in Germany’s troubled truck road toll project. Additionally, DT’s European internet business T-Online failed to meet its 4Q market forecasts, sending its share price tumbling 6% to EUR9.79. Sales growth at T-Online slowed to 10% and whilst EBITDA rose 57% to EUR83.2 million, it still fell EUR10 million short of expectations.

Germany, Deutsche Telekom (DT), T-Online