Deutsche Telekom has posted a net profit of EUR2.415 billion for the third quarter of 2005, beating forecasts on the back of a number one-off gains and tax effects. The German group’s thriving T-Mobile unit helped offset continuing falling revenues in its fixed line business. EBITDA rose 3.7% to EUR5.487 billion on sales of EUR15.043 billion, in line with forecasts. T-Mobile increased sales by 10.6% and won 2.2 million new customers in the quarter, half of which were in the US, whilst T-Mobile Germany surpassed expectations by adding 530,000 new customers and increasing profit margins. Sales in the group’s broadband and fixed line division continued to decline, falling 0.8% to EUR5.387 billion in the period.
Despite the overall strong performance, the telco warned investors that EBIDTA is likely to dip next year before recovering in 2007. It announced an ambitious growth plan which will include extra investments of EUR1.2 billion but will still only hold core earnings at best flat next year. Net debt fell by EUR3.7 billion in 3Q to EUR40.8 billion and Deutsche Telekom is cutting 32,000 German staff, mainly at its fixed line business, to try to help counter sliding revenues.