Deutsche Tel profit halves in 1Q

Deutsche Telekom management claim to be satisfied with the telco’s performance in the first quarter, despite net profit more than halving year-on-year.
The firm’s profit fell 50.4% to €238 million on a 1.1% decline in revenue year-on-year to €14.4 billion, and an 8.1% fall in EBITDA to €3.9 billion. However, management is bullish after growing net cash 11.4% to €2.9 billion and cutting net debt by €3.1 year-on-year in the recent quarter.
René Obermann, Deutsche Telekom’s chief executive, said the first quarter was “very satisfying” and saw the telco make “significant progress in many areas.”
The firm’s domestic business provides an example of the progress made during the quarter, with revenue declines limited to 2.3% year-on-year thanks to a stronger showing from its fixed line business – in particular its wholesale business which saw sales fall by 3.9% compared to double digit losses in 2011. However, overall mobile service revenues dipped 1.8%, despite a 20% rise in mobile data income during the period.
Deutsche Telekom’s other European businesses paint a similar picture to Germany, with all remaining profitable despite an overall 2.6% fall in revenue year-on-year.
The telco’s troubled US business – T-Mobile USA -, generated revenue growth during the quarter, though Deutsche Telekom notes the improvement was in part due to positive forex factors.