US boosts DT Results in the Third Quarter
Foto: Dražen Tomić - Tomich Productions
Following the merger of T-Mobile US and Sprint, Deutsche Telekom’s key financials increased significantly in the thrid quarter of 2020. Revenue increased by 31.9 percent to 26.4 billion euros.
Adjusted EBITDA AL increased by 49.6 percent to 9.7 billion euros. But even in organic terms, adjusted for changes in the composition of the Group and exchange rate effects, the Group recorded growth of 2.0 percent in revenue and 10.0 percent in adjusted EBITDA AL.
On the back of the strong performance in the first nine months and a positive outlook for the rest of the year, the Group raised its guidance for the current financial year. DT now expects to report adjusted EBITDA AL of at least 35 billion euros and free cash flow of at least 6 billion euros. This puts the guidance for adjusted EBITDA AL around a billion euros higher and for free cash flow around 0.5 billion euros higher than it was in August.
The rest of the Group also expects higher adjusted EBITDA AL for the full year of around 14.0 billion euros, despite the negative impact of the coronavirus pandemic. Previously, the guidance for the Group ex U.S. had stood at 13.9 billion euros. Deutsche Telekom confirmed its plans to award an unchanged dividend of 60 euro cents per share.
“Deutsche Telekom is showing its strengths,” said CEO Tim Höttges. “We are raising our guidance thanks to strong business on both sides of the Atlantic. And we are able to do this despite feeling the effects of the pandemic in some areas.”
Free cash flow declined by 23.9 percent in the quarter to 1.6 billion euros, but after nine months is still up on the prior-year level at 5.3 billion euros. Net profit decreased by 40.3 percent to 0.8 billion euros year-on-year in the third quarter, mainly due to an impairment loss recognized in the Systems Solutions segment as a result of the dampened short and medium-term expectations for the business. Adjusted for special factors, net profit increased by 6.3 percent to 1.5 billion euros.
DT in Germay grew much faster between July and September than in the previous quarters, with 97,000 net broadband additions. Around 15.5 million lines in Telekom’s network are now fiber-optic-based, 1.6 million more than a year ago.