Wednesday, August 8, 2018

Deutsche Telekom posts 1.3% growth, raises guidance

For the second quarter of 2018, Deutsche Telekom reported net revenue rose 1.3 percent year-on-year in organic terms, reaching 18.4 billion euros. Adjusted EBITDA rose 3.9 percent in organic terms to 5.9 billion euros. Adjusting for currency variation, revenue was down slightly, by 2.8 percent, while reported adjusted EBITDA was down 0.3 percent.

Citing the positive financial outlook for its U.S. subsidiary, Deutsche Telekom revised upward its full-year guidance for adjusted EBITDA for the second time this financial year.

Some highlights

  • Mobile service revenues rose 2.9 percent year-on-year in the second quarter, reaching 1.7 billion euros. 
  • 45 percent of mobile contract customers (consumers) under the Telekom brand name already use a product bundle from the MagentaEINS portfolio, compared with 38 percent a year earlier. 
  • At the end of the second quarter, there were 3.9 million MagentaEINS customers, about half a million more than in the second quarter of 2017.
  • Over the last twelve months, Telekom has put 1,000 new mobile sites into operation in order to close remaining gaps in coverage. 
  • 74 percent of households in Germany with a fixed line now have access to fiber-optic-based products (FTTH, VDSL/vectoring), compared with 67 percent a year ago.
  • With 624,000 additional customers opting for fiber-optic-based products, and the overall number rising to almost 11 million, the success of this strategy was once again evident. 
  • Deutsche Telekom added another 80,000 customers overall in the broadband market.
  • In the second quarter of 2018, the Germany operating segment posted a year-on-year increase of 1.9 percent in adjusted EBITDA to 2.1 billion euros. One factor in this growth was a reduced cost base, which fell 2.1 percent to 3.3 billion euros. Revenue decreased slightly, declining 0.9 percent to 5.3 billion euros.
United States
  • T-Mobile US second-quarter service revenues rose 6.1 percent year-on-year to reach 7.8 billion U.S. dollars. Adjusted EBITDA increased by 5.1 percent to 3.0 billion U.S. dollars.
  • The number of branded postpaid customers rose by more than one million in the second quarter. 
  • Overall, T-Mobile US reported 1.6 million new customers in the second quarter – its 21st consecutive quarter of million-plus growth. As of June 30, the customer base was 75.6 million.
  • Revenue in the Europe operating segment rose 1.3 percent to 2.9 billion euros. 
  • There was a year-on-year increase of 1.8 percent in mobile service revenues.
  • Magyar Telekom (Hungary) delivered the strongest growth in mobile business. 
  • The upward trend in new mobile contract customers (plus 336,000) and new broadband customers (plus 73,000) continued to hold in the second quarter. 
  • The number of customers opting for these convergent products rose 48.3 percent to 2.7 million. 
Systems Solutions
  • Systems Solutions’ total revenue decreased 0.8 percent to 1.7 billion euros. The decline in earnings indicators was accentuated by capital expenditure in areas promising future growth, with adjusted EBITDA falling 11 percent to 121 million euros compared with the prior-year quarter. T-Systems is thus on track for the full-year guidance for 2018.
  • At the end of June, T-Systems launched a transformation program under the motto Investing while Saving to get the company back on the path to growth. 

See also