DT Q4 net loss weighed down by US, Greek impairments

23 Feb 2012

German telecoms giant Deutsche Telekom (DT) has said its unadjusted net loss for the fourth quarter of 2011 widened to EUR1.34 billion (USD1.77 billion) from a loss of EUR514 million in the year-ago period, due to impairments of around EUR3.3 billion on its US and Greek operations. A EUR2.3 billion cash payment from AT&T, which formed part of a USD6 billion breakup package after a deal to sell T-Mobile USA to its rival was abandoned, failed to offset the writedowns. Net profit for the year ended 31 December 2011 totalled EUR557 million, compared to EUR1.695 billion in 2010. Total reported net revenue dropped 3.7% year-on-year to EUR14.911 billion in the three months ended 31 December 2011, and totalled EUR58.653 billion in full year 2011, down 6.0% from EUR62.421 billion twelve months earlier, due in part to ‘continued intense competition in many markets, a difficult economic environment in several countries, and burdensome regulatory decisions’. Domestic revenue dropped 3.3% during 2011 to EUR26.361 billion, while turnover generated by the group’s international business fell 8.1% to EUR32.292 billion. DT said unadjusted earnings before interest, tax, depreciation and amortisation (EBITDA) totalled EUR7.265 billion in Q4 2011, compared to EUR3.383 billion in the year-ago quarter, and grew 15.6% during full year 2011 to EUR20.022 billion. Taking into consideration higher expenses for the rollout of Long Term Evolution (LTE) in the US, DT expects adjusted EBITDA of around EUR18 billion and free cash flow of around EUR6 billion for the 2012 financial year.

In it domestic market, DT reported a total of 35.403 million mobile customers at the end of 2011, an increase of 2% year-on-year, while retail broadband lines grew 2.6% over the period to 12.265 million. Fixed lines continued their downward trend during 2011, falling by 5.1% to 23.399 million at year-end. The firm’s Europe operating segment, (which excludes Germany and includes the operations of Greek unit OTE), reported a total of 60.293 million mobile customers at the close of 2011, up slightly from 60.1 million a year earlier. T-Mobile USA meanwhile saw total wireless subscribers drop 1.6% over the period to 33.185 million. In the fourth quarter alone, the US subsidiary lost 802,000 contract customers, 706,000 of them branded subscribers, following the market launch of the new Apple iPhone model by three rivals in October.

Germany, Deutsche Telekom (DT)