Greek asset pushes Deutsche profits

Deutsche Telekom has reported a 23% increase in quarterly profits, bolstered by the  integration of Greek acquisition OTE.

The German telco reported a Q2 profit of €521 million, up from €394 million for Q2 last year . Sales were up 7.2%  to €16.2 billion.

While last week, European carriers Telefonica , BT Group and France Telecom beat analysts negative forecasts, Deutsche Telekom came in lower than expected. Bloomberg estimated a profit of €743 million.

Deutsche Telekom said that measures to improve struggling units, such as its UK arm, T-Mobile, were starting to take effect. Last quarter the value of UK’s  T-Mobile was written down by €1.8 billion and management was overhauled. T-Mobile UK shed 206,000 subscribers in the year to June 30.

Deutsche CEO Rene Obermann said “we took resolute action at the right time in a difficult environment. The figures for the second quarter make us confident for the full year.”

Deutsche Telekom affirmed a full year group forecast of adjusted EBITDA dropping between 2-4% from last year. It also reiterated that full-year free cash flow would be €7 billion euros, an increase of about €600 million from a previous forecast due to the positive OTE contribution.

Deutsche Telekom is still in talks to sell its UK arm with recent speculation suggesting that it was considering swapping T-Mobile UK against Vodafone’s operation in Turkey.

In May, Deutsche Telekom announced that the book value of T-Mobile UK was €5.3 billon, which included €1.4  billion in debt..

While T-Mobile US reported a fall in net income of 6% it added 325,000  new customers. “We see opportunities for new growth given the anticipated growing demand for innovative mobile Internet and data services in the U.S. market,” Obermann said.