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DT posts 1Q EUR1.1 billion net loss

7 May 2009

German telecoms giant Deutsche Telekom (DT) has reported its fiscal results for the three months ended 31 March 2009, posting a 6.2% rise in revenue year-on-year to EUR15.9 billion (USD21.15 billion), thanks to the first-time inclusion of Greek fixed line and mobile group OTE. Compared to the same period a year earlier, DT recorded adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 2.7% to EUR4.8 billion, however, without the inclusion of OTE, revenue in the first quarter of 2009 was stable at EUR15 billion and adjusted EBITDA declined 4.8% to EUR4.5 billion. The company reported adjusted profit in the first quarter of EUR700 million, a 12.7% decrease on last year’s figure of EUR800 million, and an unadjusted net loss of EUR1.1 billion, compared with a net profit of EUR900 million in the first three months of 2008. The group has attributed this net loss to the impairment of goodwill at T Mobile UK amounting to EUR1.8 billion, reflecting the economic slowdown and more intense competition in the UK. DT’s chairman of the board of management, Rene Obermann, commented: ‘The figures we are presenting today show a mixed picture: Despite the difficult environment in some markets, we are in a relatively stable position.’

In DT’s international mobile communications segment, subscribers in the US and Europe topped 148.4 million at 31 March 2009, up 6.8% year-on-year. Revenue increased by 9% to EUR9.2 billion in Q1 2009, while adjusted EBITDA declined 1.9% to EUR2.61 billion. T Mobile USA reported revenue growth of 19.5% to EUR4.1 billion and an increase in adjusted EBITDA of 9.8% to EUR1.1 billion. Measured in US dollars, the growth in revenue was significantly lower, at 4.1%, while EBITDA decreased by 4.4%. The impact of the economic downturn was felt as much in the US as in the UK and Poland, where negative exchange rate effects intensified the declining trend in revenue and earnings. T-Mobile UK and T-Mobile Slovensko saw a fall in subscriber numbers year-on-year; during Q1 2009 the former’s mobile customers declined 2.6% to 16.67 million, while the Slovakian subsidiary’s subscribers fell 0.2% to 2.331 million. In the domestic mobile market, T Mobile Deutschland’s revenue remained relatively stable, down 0.5% year-on-year to EUR1.9 billion, while adjusted EBITDA fell 1% to EUR700 million. At 31 March 2009 T-Mobile Deutschland recorded a total of 38.98 million subscribers, up 5% compared to the same date in 2008.

DT’s Broadband/Fixed Network segment figures have also been largely influenced by the first-time inclusion of OTE. Revenue increased by 3.6% to EUR5.9 billion and adjusted EBITDA by 6.2% to EUR2billion. At 31 March 2009 DT’s international subsidiaries served around 3.2 million retail DSL customers, including 1.6 million at OTE’s subsidiaries in Greece and Romania. T Home’s revenue from business in Germany declined 5.7% to EUR4.8 billion in the first quarter of 2009 as a result of losses caused by regulatory factors. Adjusted EBITDA decreased 2.5% in the same period to EUR1.6 billion. A total of 390,000 new retail broadband customers were added in the quarter, up 14.9% year-on-year, bringing the number of domestic retail DSL customers to 11 million. The number of fixed lines in Germany continued its downward trend, falling 8.3% to 31.19 million in the first three months of 2009. In addition, some 240,000 lines were lost as a result of the transfer of DSL resale customers to the company’s all-IP platform.

Meanwhile, T-Systems’ international revenue increased by 6.4% to EUR634 million; however, revenue in Germany declined 8.2% to EUR1.47 million, attributed to the reduced volume of internal business, which was down 12.4%. Total revenue in the first quarter of 2009 amounted to EUR2.1 billion, a year-on-year decrease of 4.3%, while total adjusted EBITDA increased 3.4% to EUR211 million. New orders in Q1 2009 were down 14.7% year-on-year to 2.01 million.

Germany, Deutsche Telekom (DT)

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