UPDATE: Deutsche Telekom Swings Into 1Q Net Loss On UK Operations
07 Mai 2009 - 8:27AM
Dow Jones News
Deutsche Telekom AG (DT) Thursday said it took a EUR1.8 billion
write-down on its struggling U.K. operations as it swung to a
first-quarter net loss.
It also amended its full-year outlook, which it had already
revised down in a surprise profit warning last month, to account
for the consolidation of Hellenic Telecommunications Organization
SA (OTE).
Deutsche Telekom said its net loss in the quarter ended March 31
was EUR1.12 billion compared with a net profit of EUR924 million a
year earlier. Deutsche Telekom's bottom line was hurt by the EUR1.8
billion impairment charge on the goodwill of its T-Mobile
operations in the U.K.,for which it said it is reviewing all its
options. Deutsche Telekom wrote down almost all of the EUR2.1
billion goodwill on its U.K. mobile operations.
Deutsche Telekom April 21 said its 2009 operating profit will
fall short of expectations on weak mobile operations in the U.S.,
the U.K. and Poland, in particular.
The company said Thursday that it expects 2009 earnings before
interest, tax, depreciation and amortization, or Ebitda, adjusted
for exceptional items to be 2% to 4% below 2008's EUR19.5 billion
level, but added that OTE will contribute an additional EUR2
billion to its 2009 adjusted Ebitda. Free cash flow including OTE
is set to reach around EUR7 billion, to which OTE is expected to
contribute EUR0.6 billion.
The Bonn-based company confirmed that including OTE its first
quarter sales were up 6.2% on year to EUR15.9 billion while
earnings before interest, taxes, deprecation and amortization,
adjusted for special items, rose 2.7% to EUR4.81 billion.
Without OTE, however, adjusted Ebitda was down 5% to EUR4.5
billion on flat sales.
Deutsche Telekom was the first European integrated operator to
lower its guidance due to adverse economic conditions, sending it
shares lower at the time. France Telecom (FTE) also late April said
Ebitda fell and margins remained under pressure, but reiterated its
full-year outlook.
BT Group PLC (BT) and Spain's Telefonica SA (TEF) report next
week.
Despite 6.8% year-on-year growth in its mobile customer base and
a 9% increase in revenue, adjusted Ebitda was down 1.9%.
In the U.S., T-Mobile's key growth driver in the past, revenue
growth slowed to just 4.1% while adjusted Ebitda was down 4.4% in
dollar terms due to slower top-line growth and higher costs for
sales, handset subsidies and investment in third generation
networks.
T-Mobile's net additions in the first quarter, defined as new
customers minus churn, were 68.4% down on year. In Germany,
T-Mobile lost 118,000 customers and in the U.K. 111,000 customers
in the January to March quarter.
Company Web site: www.telekom.de
-By Archibald Preuschat, Dow Jones Newswires, +49 211 138 7218,
archibald.preuschat@dowjones.com