DT reports stable revenue as pay-TV and mobile data offset decline in voice

9 Aug 2012

German telecoms giant Deutsche Telekom (DT) has released its financial results for the three- and six-month periods ended 30 June 2012, with the company reporting relatively stable turnover bolstered by what it said were ‘positive net exchange rate effects of around EUR400 million (USD519 million), primarily from the translation of US dollars into euros’. For the first half of 2012 DT reported group revenue of EUR28.811 billion, down by 0.9% year-on-year compared to the same period of 2011, with turnover for the second quarter coming in at EUR14.379 billion, representing a 0.7% drop against 2Q11. DT noted that the development of pay-TV services and increased revenue from mobile data services had proved positive factors over the six-month period, while it pointed to decline in turnover from voice telephony, price changes imposed by regulatory authorities and intense competitive pressure as those issues exerting a downward pressure on revenue.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months to end-June 2012 stood at EUR9.174 billion, almost unchanged from EUR9.167 billion a year earlier, with the company citing ‘comprehensive cost management’ as having helped to partially offset negative effects including ‘fixed network lines lost to competitors, price changes imposed by regulatory authorities and special taxes on telecommunications services’. DT meanwhile recorded net profit of EUR852 million for the first half of the 2012 fiscal year, up 2.9% y-o-y from EUR828 million, with the company’s bottom line boosted as it improved losses from financial activities particularly, it said, as a result of the sale of shares in Telekom Srbija.

Cash capital expenditures (CAPEX) for the first six months of 2012 stood at EUR3.754 billion, down some 6% against spending in the same period of 2011. The lower expenditures, DT noted, stemmed mainly from Europe, where it said cash CAPEX had fallen 8.8% against H1 2011, with most of its subsidiaries ‘exercising restraint’ as a result of difficult market situations, decisions by regulatory authorities, or additional financial burdens.

In operational terms, at the end of June 2012 DT’s domestic wireless subscriber base stood at 35.470 million (up from 34.517 million a year earlier), while fixed broadband connections increased by 2.1% y-o-y to reach 12.414 million. Pay-TV access meanwhile surged by 40.7% against end-June 2011 to 1.830 million. Internationally, the group’s US subsidiary ended the first half of the year with 33.168 million mobile subscribers, down 1.2% against the same date a year earlier, while across all of its European operations (excluding the UK) its wireless voice customers numbered 60.814 million, up 2.2% compared to the 59.476 million it had at end-June 2011.

Commenting on the results, DT’s CEO Rene Obermann said: ‘We are keeping our word and providing a good deal of reliability to the market with very solid figures … We do of course continue to face a number of challenges, but we are performing very respectably compared with our competitors.’

Germany, Deutsche Telekom (DT)