Deutsche Telekom Swung to a Loss
For 3rd Quarter on 3G License Costs
Dow Jones Newswires
BERLIN -- Deutsche Telekom AG Wednesday posted a third-quarter net loss and reiterated its expectations for a full-year loss, mainly due to heavy write-offs on acquisitions and the cost of third-generation mobile-telephone licenses.
The German telecommunications giant posted a loss of 627 million euros ($553.9 million) for the latest quarter, compared with a profit of 4.11 billion euros in the same period a year earlier. Sales in the third quarter rose 25% to 12.53 billion euros from 10.01 billion euros a year earlier.
For the first nine months of the year, Deutsche Telekom posted a 15% rise in earnings before interest, taxes, depreciation and amortization, excluding special items, to 11.33 billion euros, from 9.86 billion euros a year earlier. The figures were slightly better than analysts' expectations of an Ebitda of 11 billion euros, excluding special items.
The company had significant special items both this and last year, related mostly to gains from divestments. Special items in the nine-month period totaled 2.75 billion euros, down from 7.88 billion euros last year, the company said.
Germany's T-Online Reports Smaller-Than-Expected Loss (Nov. 7)
Deutsche Telekom Posts $2.81 Billion Loss, Blaming Acquisition, 3G-Licensing Costs (Nov. 1)
In the nine-month period, the company's net loss was slightly smaller than it had indicated in its preliminary earnings. The net loss was one billion euros, compared with a preliminary figure of 1.1 billion euros released at the end of October. Last year, Deutsche Telekom posted a net profit of 8.45 billion euros for the nine months, which was boosted by extraordinary gains from divestments and proceeds from listing shares in Internet unit T-Online International AG.
Goodwill write-offs and costs related to licenses to operate universal mobile telecommunications systems, or UMTS, wireless networks weighed on the earnings and wiped out gains from selling shares in two U.S. fixed-line and wireless service providers, as well as the divestment of some of its cable-television assets.
The company posted sales for the first nine months of 34.99 million euros, up 20% from 29.22 billion euros in the year-earlier period. Sales were also in line with preliminary figures.
But Deutsche Telekom remained conservative in its outlook for the full year, saying only that sales would rise more than 15%.
A likely net loss for the full year wouldn't affect its ability to pay a dividend, the company added.
The company's wireless business, T-Mobile, showed a strong increase in both sales and Ebitda, but its pretax losses widened sharply. Sales for T-Mobile rose 40% to 10.2 billion euros in the first nine months, up from 7.3 billion euros a year earlier.
Sales were boosted by the June consolidation of U.S. wireless mobile-phone business VoiceStream, which contributed 1.5 billion euros. Czech wireless provider RadioMobil also contributed about 300 million euros since its consolidation in April.
T-Mobile's sales also benefited from the increase in subscribers in its German and British wireless-service providers, the company said.
Ebitda adjusted for special items rose to 2.18 billion euros in the first nine months, from 951 million euros, supporting the company's claim that it will double T-Mobile's Ebitda for the full year.
Pretax losses, however, widened significantly for the unit, which is preparing for a market listing, possibly next year. Pretax loss widened to 3.2 billion euros, from 1.2 billion euros.
Most of that loss came in the third quarter, which was the first full quarter in which VoiceStream was consolidated. In the third quarter, the unit posted a pretax loss of 1.6 billion euros, compared with a loss of 363 million euros a year ago.
Deutsche Telekom's listed Internet service provider, T-Online, saw its sales rise to one billion euros, from 783 million euros last year.
T-Online's losses, however, continued, with an Ebitda loss of 67 million euros, compared with a profit of 54 million euros last year. Pretax loss was 103 million euros in the first nine months, compared with a pretax profit of 2.7 billion euros last year, which was boosted by proceeds from its listing.
The company's fixed-line unit, T-Com, posted a fall in both profits and sales related to the divestment of its regional cable television businesses.
T-Com's sales fell to 19.6 billion euros in the nine-month period, from 20.4 billion euros last year. Ebitda adjusted for special items declined to 5.9 billion euros, from 6.3 billion euros.
Systems consultancy T-Systems posted sales of 10.1 billion euros, up from 7.1 billion euros last year.
The pretax loss for T-Systems for the first nine-months was 197 million euros, compared with a pretax profit of 2.9 billion euros last year. However, business improved in the third quarter, with the company posting a pretax profit of 93 million euros. |
