Deutsche Telekom Q1 Profit Surges, Lifts FY22 Earnings View

Deutsche Telekom AG on Friday raised its fiscal 2022 adjusted earnings forecast after reporting significantly higher net profit in its first quarter. Shares of the German telecom major were gaining around 1 percent in the morning trading in Germany.

For fiscal 2022, the company now expects to post adjusted EBITDA AL of more than 36.6 billion euros, higher than previous guidance of around 36.5 billion euros. The revision in outlook reflects the sound business performance in the United States operating segment.

For free cash flow AL, the company now expects more than 10 billion euros, while previous view was around 10 billion euros.

For the first quarter, net profit quadrupled to 3.95 billion euros from 936 million euros in the previous year. Earnings per share were 0.79 euro, up from 0.20 euro a year ago.

The increase was primarily driven by the sale of 50 percent of the FTTH company GlasfaserPlus to IFM and gain on the sale of T-Mobile Netherlands unit.

Adjusted net profit was 2.24 billion euros or 0.45 euro per share, compared to prior year’s 1.20 billion euros or 0.25 euro per share.

EBITDA climbed 26.4 percent from last year to 13.09 billion euros, and adjusted EBITDA grew 7 percent to 11.44 billion euros.

EBITDA AL increased 26 percent to 11.09 billion euros, and adjusted EBITDA AL grew 6.8 percent year-over-year to 9.87 billion euros. The growth was 2.4 percent organically.

Adjusted EBITDA AL margin grew 35.2 percent from 35 percent last year.

Revenue for the first quarter increased 6.2 percent to 28.02 billion euros from last year’s 26.39 billion euros. Service revenues grew 10 percent from last year to 22.29 billion euros.

In organic terms, revenue increased by 1.7 percent and service revenue by 4.7 percent.

Revenue growth in the United States was 9.5 percent on a reported basis and 1.5 percent organically due to higher service revenues.

Germany segment increased revenue by 0.9 percent, while Europe segment revenue declined 0.9 percent on a reported basis but increased 4.2 percent in organic terms.

Revenue in Systems Solutions decreased 1.9 percent year-on-year, due primarily to the decline in traditional IT infrastructure business, in line with expectations.

In the quarter, mobile customers, including T-Mobile US wholesale customers, increased 2.2 percent from last year to 248.3 million. Meanwhile, Fixed-network lines fell 4.8 percent, and broadband customers, excluding wholesale, edged down 0.7 percent.

In Germany, Deutsche Telekom shares were trading at 18.08 euros, up 0.71 percent.

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