Deutsche Telekom Q4 EBITDA beats consensus due to T-mobile, lower costs UPDATE
02.03.2006 08:30:43, AFX Europe Focus
(Updates with EBITDA outlook for T-COM)
BONN (AFX) - Deutsche Telekom AG said fourth-quarter EBITDA excluding
one-offs rose to 5.199 bln eur from 4.71 bln in the year-ago quarter, beating
consensus, on the back of strong growth at its wireless unit T-Mobile in the US
and tighter cost structures.
Analysts polled by AFX News had forecast EBITDA at 5.109 bln eur.
Sales in the quarter reached 15.517 bln eur, up from 14.72 and exceeding
analysts' expectations of 15.493 bln.
Net profit adjusted for one-offs was at 1.022 bln eur from 614 mln, missing
the consensus forecast of 1.182 bln and including one-offs it was down to 989
mln eur from 1.74 bln after the company booked a goodwill depreciation of 1.9
bln eur for the UK operations of its T-Mobile unit.
It said Telefonica's takeover of the UK mobile communications company O2 had
generated a new benchmark for the market price of the UK mobile business and
according to accounting standards, this indication of market price must be given
priority in the calculation of goodwill and thus led to a non-cash impairment of
1.9 bln eur of T-Mobile UK.
The telecoms giant said it will pay a total dividend of 0.72 eur per share,
up from 2004's 0.62 eur.
For the fourth quarter, net cash from operating activities were down by 12.2
pct to 4.916 bln eur, and as of end-2005, net debt was 3.2 pct lower at 38.639
bln eur.
A net total of around 0.6 bln eur extraordinary one-offs had a negative
impact on full year EBITDA, which rose 3.7 pct to 20.1 bln eur and when adjusted
for one-offs, improved by 5.7 pct to 20.7 bln
It booked special costs of around 1.2 bln eur for personnel-related measures
but these were partially offset by extraordinary positive factors of 0.8 bln due
to a reversal of provisions for a health insurance fund for employees still
classified as civil servants.
Deutsche Telekom confirmed sales and earnings forecasts for 2006 and 2007,
saying it still expects EBITDA to fall to 20.2-20.7 bln eur this year and to
increase by 1.5 bln eur to reach 21.7-22.2 bln in 2007.
But it said the fixed line division T-COM, which industry observers said is
losing customers heavily to rivals, is expected to post a lower EBITDA this year
compared with 2005 before posting growth in 2007.
Fourth quarter EBITDA of its T-Mobile division rose to 2.488 bln eur from
2.07 bln and for the fixed line business T-COM, it was at 2.549 bln from 2.50.
"2005 was not an easy year for us, but it was successful in terms of the
company's financial development. Competition in our markets has become tougher -
and I mean much tougher," said chief executive Kai-Uwe Ricke.
"Nonetheless we managed to hit our targets and continue the positive
development of Deutsche Telekom in 2005. We have continued to grow in a
profitable way - without additional acquisitions," he added.
The company cited in particular "the positive development" in T-Mobile,
which posted a 17.5 pct climb in fourth quarter sales to 7.9 bln eur, as a major
contributing factor to group revenues.
T-Mobile attributed its growth not only to the consolidation of the Slovak
mobile communications investment for the first time but also to customer growth
of its US operations.
The Broadband/Fixed Network business area, T-COM, posted a full year 3.6 pct
fall in revenues to 26.0 bln eur although in the fourth quarter alone, the
decline was much smaller at 1.5 pct. The quarter-on-quarter decline in revenue
had slowed down, it added.
marilyn.gerlach@afxnews.com
mog/lam/mog/lam
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