Deutsche Telekom earnings boosted by momentum in US and Germany
Adjusted earnings before interest, taxes, depreciation and amortisation after leases rose 6.4% from a year earlier to 11.1 billion euros in Q3
DEUTSCHE Telekom, Europe’s largest telecommunications operator, increased profitability in the third quarter through cost discipline and a strong performance in the US and Germany.
Adjusted earnings before interest, taxes, depreciation and amortisation after leases rose 6.4 per cent from a year earlier to 11.1 billion euros (S$15.7 billion) in the third quarter, the carrier said in a statement on Thursday. Analysts had forecast 11.05 billion euros, according to the average of estimates compiled by Bloomberg.
The German carrier is outperforming its peers in Europe, largely driven by its majority holding in US carrier T-Mobile US, which earlier reported strong subscriber growth for the quarter and raised its 2024 earnings outlook. That stake, along with cost-cutting measures, has allowed the company to improve cash flow, raise its dividend, and invest in technologies such as artificial intelligence. US service revenue rose 4.2 per cent to 15.2 billion euros.
In Germany, the company has been investing heavily in fibre networks and customer service, including a loyalty programme for residential customers that’s helped reduce the churn rate. Service revenue in the country grew 2.1 per cent to 5.65 billion euros for the quarter.
“The growth momentum continues unabated on both sides of the Atlantic,” said Christian Illek, chief financial officer of Deutsche Telekom. “At the same time, we have successfully brought our leverage ratio back down to below our target value.”
Organic net revenue for the quarter was up 3.6 per cent to 28.5 billion euros compared with the same quarter last year.
Deutsche Telekom raised its 2024 adjusted Ebitdaal outlook slightly to €43 billion, up from 42.9 billion euros. It expects the same metric to grow by 4 per cent to 6 per cent a year through 2027, chief executive officer Tim Höttges told investors at its capital markets day last month. It also proposed a share buyback program of as much as 2 billion euros in 2025 and a record dividend of 90 euro cents per share next year for the current financial year.
Deutsche Telekom shares closed at 27.85 euros on Wednesday. They have risen 28 per cent so far this year. BLOOMBERG
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