DT writes down BT stake by EUR2.2bn; FY16 revenue up 5.6%

2 Mar 2017

German telecoms group Deutsche Telekom (DT) has reported revenue of EUR73.095 billion (USD77.1 billion) for the twelve months ended 31 December 2016, an increase of 5.6% from EUR69.228 billion the previous year. The growth was mainly driven by T-Mobile US, which posted a 16.6% year-on-year rise in turnover to EUR28.925 billion, thanks to rapid customer growth. As a result, international revenues accounted for 66.3% of DT’s total in 2016, compared to 63.8% the previous year. The Bonn-based telco posted group EBITDA of EUR22.544 billion for full year 2016, up 22.6% from EUR18.388 billion in 2015, while adjusted EBITDA grew 7.6% over the same timeframe to EUR21.420 billion. Reported net profit (including special factors) fell 17.8% from EUR3.254 billion to EUR2.675 billion over the twelve-month period. This was attributed to an impairment loss of EUR2.2 billion recognised in the fourth quarter on the financial stake of 12% of the shares in BT Group, mainly as a result of declines in BT’s share price and in the pound (GBP) following the Brexit referendum. Adjusted net profit, meanwhile, was stable at EUR4.114 billion.

DT’s domestic operating segment generated revenue of EUR22.041 billion in 2016, a decrease of 1.7% from EUR22.421 billion the previous year, primarily due to lower mobile terminal equipment revenue and the ongoing decline in the traditional single-play telephone business, while EBITDA fell by 4.3% to EUR7.890 billion. The firm’s German mobile subscriber base reached 41.849 million at the end of 2016 (an increase of 3.7% from 40.373 million a year earlier), of which 25.219 million were post-paid customers (up 6.4%). Domestic fixed broadband lines grew 2.2% y-o-y to 12.922 million (of which 4.250 million were fibre-based – VDSL, Vectoring and FTTH – lines, up by 45.4%) and pay-TV accesses rose 7.3% to 2.879 million, while fixed network lines continued to slide, falling from 20.227 million at the end of 2015 to 19.786 million twelve months later.

T-Mobile US ended December 2016 with 71.455 million mobile subscribers, an increase of 12.9% from 63.282 million a year earlier, as the number of branded post-paid customers rose 8.6% y-o-y to 34.427 million. In contrast, total mobile customers across DT’s European operations declined by 2.0% to 51.699 million during 2016, although retail broadband lines and TV customers grew by 7.1% to 5.557 million and 3.7% to 4.049 million, respectively. Revenue in the Europe segment fell by 2.1% y-o-y to EUR12.747 billion in FY 2016 and adjusted EBITDA dropped 5.4% from EUR4.329 billion in 2015 to EUR4.094 billion the following year, primarily owing to higher market investments with a view to attracting more customers in the fourth quarter.

Germany, Deutsche Telekom (DT), T-Mobile US