Thursday, August 9, 2012

Deutsche Telekom Maintains Free Cash Flows as Revenues, Subscribers and CAPEX Decline

Deutsche Telekom reported a solid growth trend in free cash flow in the second quarter of 2012 and the company confirmed its earnings and dividend guidance for the full year 2012.

For Q2, EBITDA remained unchanged year-on-year at EUR 4.7 billion. Revenue declined 0.7 percent to EUR 14.4 billion. Free cash flow in the second quarter came in at EUR 1.7 billion, a year-on-year decrease of around 5.6 percent.

For Q2, CAPEX was EUR 1.626 billion, down 13.5% from a year earlier. For the first half of the year, the Group invested EUR 3.8 billion in CAPEX, 5.1 percent less in terms of cash capex than in the prior-year period.

"We are keeping our word and providing a good deal of reliability to the market with very solid figures," said René Obermann, CEO of Deutsche Telekom. "We do of course continue to face a number of challenges, but we are performing very respectably compared with our competitors."

Some highlights:
  • In Germany, the company now has 1.8 million Entertain TV customers, up 40.7 percent over the prior-year period. Over 100,000 new customers signed up for this television service in Q2.
  • In Germany, the mobile contract customer base grew by 464,000 customers in the past quarter. Most of these new customers were added in the reseller segment, which generates lower average revenues per user.
  • In Germany, the number of line losses fell to a record low once again, dropping to 236,000 between April and June. This represents a year-on-year decrease of 20 percent.
  • Growth in mobile data revenues continued unabated, with a 19-percent increase to EUR 484 million in the second quarter.
  • Twenty-nine percent of the average revenue per user now comes from mobile data compared with 24 percent one year ago.
  • In Greece, DT credited successful cost cutting measures with improving the efficiency of OTE, where adjusted EBITDA margin increased by 2.2 percentage points year-on-year to 36.4 percent in the second quarter of 2012.
  • Cutting costs also had a positive impact on profitability in the Netherlands. T-Mobile Netherlands achieved an adjusted EBITDA margin of 31.7 percent compared with 29.4 percent the previous year.
  • The number of mobile contract customers across all European companies increased by around 1.0 million to 27.6 million in the space of a year (including T-Systems' customers in Hungary).
  • Smartphones now account for 60 percent of all devices sold, up from 43 percent one year ago. The more widespread use of smartphones also impacted mobile data revenues, which grew by 21.2 percent year-on-year in Europe, or as much as 24.5 percent when adjusted for exchange rate effects.
  • T-Mobile USA significantly improved its profitability. The adjusted EBITDA margin rose 2.3 percentage points year-on-year to 27.7 percent, as revenue increased 8.7 percent to EUR 3.8 billion. Measured in dollars, there was a slight decline of 3.1 percent in revenue for the second quarter of 2012 and an increase of 5.7 percent in adjusted EBITDA compared with the prior-year period.
  • T-Mobile USA had an overall loss of 205,000 customers in the second quarter. There were 557,000 net losses of branded contract customers. By contrast, the number of branded prepaid customers rose by 227,000, following a loss of 71,000 customers in the second quarter of 2011.
  • Average data revenue per customer for branded contract customers rose by 15 percent year-on-year in the past quarter to USD 19.16.
  • T-Systems saw new orders increase by 8.2 percent year-on-year to EUR 2.2 billion, but total revenue for the second quarter declined by 1.3 percent year-on-year to EUR 2.2 billion, with external revenues decreasing by 1.5 percent. 06-Aug-12

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