DT net income down 44%

1 Mar 2007

Europe’s largest telco by revenue, Deutsche Telekom (DT), reports today that intense competition, costs of cutting staff and a major drop in domestic market prices in 2006 are the main reasons for its 44% fall in net income. The telco’s bottom line came in at EUR3.2 billion (USD4.2 billion) for full year 2006, down from EUR5.6 billion one year previously. Adjusted EBITDA also fell year-on-year, to EUR19.4 billion, a decline of 6.2%. Although domestic sales slipped by 5% to EUR32.5 billion, this was offset by international sales growth of 13.6% to EUR28.9 billion, leaving total group revenue up slightly at EUR61.4 billion. No outlook for the coming year was given in the earnings statement; in a profit warning at the end of January it revealed that it expects adjusted EBITDA to fall slightly in 2007 to EUR19.0 billion on the back of ‘moderate’ sales growth. Later today, DT’s new CEO Rene Obermann is due to present a strategy designed to make the company more competitive.

Germany, Deutsche Telekom (DT)