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DT’s Q4 loss widens on Greece, Romania impairments

25 Feb 2011

German telecoms giant Deutsche Telekom (DT) has announced that on a reported basis – i.e. including T-Mobile UK’s operations in the prior-year figures – net revenue totalled EUR62.42 billion (USD85.9 billion) in full year 2010, down from EUR64.6 billion a year earlier, while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 6% year-on-year to EUR19.47 billion. Reported net profit in 2010 leapt from EUR353 million to EUR1.69 billion, while adjusted net profit declined slightly from EUR3.39 billion in 2009 to EUR3.364 billion in the year ended 31 December 2010. The firm posted a net loss of EUR582 million in the fourth quarter of 2010, widened from a loss of EUR3 million in the same period a year earlier, as writedowns on its Greek and Romanian operations and a special tax in Hungary weighed on earnings. Meanwhile, 4Q10 adjusted net profit totalled EUR690 million, down from EUR905 million in the year-ago period. DT said it booked charges totalling EUR1.3 billion, including some for impairments in Greece – where the firm has a 30% stake in local operator OTE – and at OTE’s Romanian subsidiary RomTelecom.

Adjusted for the deconsolidation of T-Mobile UK, which formed a joint venture with France Telecom’s UK unit Orange, effective 1 April 2010, net revenue totalled EUR62.42 billion in the twelve months ended 31 December 2010, an increase of 0.4% compared to the EUR62.15 billion reported in 2009. Adjusted EBITDA totalled EUR19.47 billion in 2010, down 3.4% from EUR20.17 billion a year earlier. Meanwhile, the company said that net profit (unadjusted for special factors) jumped 651% from EUR232 million in full year 2009 to EUR1.744 billion a year later, while adjusted net profit rose 4.7% year-on-year to EUR3.41 billion. On a quarterly basis, DT generated net revenue of EUR15.48 billion in the three months ended 31 December 2010 (up 0.4% y-o-y), while adjusted EBITDA declined 7.2% over 4Q09 to EUR4.55 billion. The firm posted a net loss of EUR607 million in the fourth quarter of 2010, while adjusted net profit fell 13.3% y-o-y to EUR665 million.

At 31 December 2010 DT reported a total of 34.694 million domestic mobile customers, down from 39.136 million a year earlier, due to the deactivation of inactive pre-paid SIM cards. At EUR25.1 billion, total revenue from DT’s domestic business in 2010 was around 1.1% lower than the previous year, although 4Q10 turnover was up 0.6% y-o-y to EUR6.4 billion. For full-year 2010 adjusted EBITDA remained stable at EUR9.6 billion. DT’s German mobile operations generated service revenue of EUR7.3 billion in 2010, an increase of 4.4% over the previous year, driven by growth in the company mobile data business, where revenues rose 36% y-o-y to EUR1.3 billion. Revenue in the fixed line segment decreased 3% y-o-y to EUR18.18 billion. At the end of 2010 the company had a total of 24.65 million fixed lines in service (down 6% y-o-y) and around 11.954 million retail broadband lines, compared to 11.477 million a year earlier. In the US market, sales were almost stable at USD21.3 billion in 2010 and were up nearly 1% in dollar terms to USD4.6 billion in Q4 2010, despite the loss of 318,000 contract customers in the quarter. At the end of 2010 T-Mobile USA reported a total wireless customer base of 33.734 million. Meanwhile, the group’s ‘Europe’ operating segment saw total revenue in 4Q10 drop 22.3% y-o-y to EUR3.91 billion, while FY10 sales fell 14% to EUR16.8 billion.

Germany, Deutsche Telekom (DT)

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