German telecoms giant Deutsche Telekom (DT) has reported its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 0.7% in 2008 to EUR19.5 billion (USD24.85 billion), exceeding the original target of EUR19.3 billion. The group’s reported net profit more than doubled to EUR1.5 billion, while free cash flow increased 6.9% to EUR7 billion, exceeding the predicted figure of EUR6.6 billion. Meanwhile, DT reported a fall of 1.4% in reported net revenue to EUR61.7 billion for 2008, compared to EUR65.2 billion a year earlier, with adjusted net revenue remaining stable at EUR62 billion. Furthermore, DT’s ‘Save for Service’ programme generated gross cost reductions of EUR4.1 billion.
On the basis of its current structure, excluding its controlling stake in Greece-based telecoms operator OTE, DT expects in 2009 an adjusted EBITDA of EUR19.5 billion, around the level achieved in 2007 and 2008. The same holds true for free cash flow, which is expected to be again around EUR7 billion in 2009.
Under its international T-Mobile brand, DT’s mobile communications revenue grew by 2.4% to EUR35.6 billion in 2008, up from EUR34.7 billion a year earlier, despite net negative exchange rate effects of EUR1.3 billion. Adjusted EBITDA rose by 6.2% to EUR11.4 billion including exchange rate effects of approximately EUR0.3 billion, while operational profit for mobile operations increased by 23.2% to EUR5.487 billion. The total mobile customer base grew by 6.3% year-on-year to 128.34 million. DT attributed this positive trend to the launch of new devices such as the Apple iPhone 3G in Europe and the Android-based T Mobile G1 which was introduced in the US and the UK in October 2008.
Broadband/Fixed revenue decline slowed to 5.1% in 2008, compared with 8% a year earlier, thanks to the market performance of T-Home in Germany. The entire operating segment reported revenue in Germany and abroad of EUR21.3 billion, 6% below the prior-year level, and adjusted EBITDA fell 4.4% to EUR7.4 billion. Operational profit for Broadband/Fixed network operations dropped 10.3% during 2008 to EUR2.91 billion. The total number of broadband customers grew by 8% year-on-year to 15.047 million by 31 December 2008, including 13.337 million in Germany and 1.71 million in Eastern Europe. At the same time, the number of fixed network lines decreased by 7.5% to 33.82 million with German fixed lines declining by 8% to 28.561 million and Eastern European fixed lines falling by 4.3% to 5.262 million.
DT announced it will move its German fixed line and mobile operations into one unit, combining sales, marketing and client service operations, as well as bundling information technology and purchasing. The company named Timotheus Hoettges as finance chief to succeed Karl-Gerhard Eick, who said in December he will leave before his term ends. ‘It is very much down to Karl-Gerhard Eick’s work over the past nine years that the company has done so well through some difficult times, and is now on a solid and stable footing,’ said CEO Rene Obermann.