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German incumbent’s bottom line quadruples on gain from EE sale, says customer growth drove revenue, earnings increases.
Deutsche Telekom on Wednesday published a strong set of first quarter financials, with customer growth, mainly in the U.S., having a positive effect on earnings.
The German incumbent reported adjusted EBITDA – excluding the €2.5 billion contribution from the sale of its 50% stake in EE to BT in January – of €5.16 billion for the three months to the end of March, an increase of 12.9% on the same quarter a year ago.
Net profit quadrupled to €3.13 billion, primarily as a result of the EE deal. Adjusted net profit grew by 1.1% to €1.05 billion.
Deutsche Telekom said it invested heavily in its IP network and in customer experience in Q1, a decision that "paid off with positive trends in customer numbers and consequently in revenue and earnings growth."
Group revenues grew by 4.7% to €17.63 billion, 65.5% of which were generated internationally, up from 63% a year earlier.
The telco’s U.S. business, its single biggest contributor to the top line, drove revenue growth, increasing turnover by 13.2% to €7.82 billion.
As T-Mobile US reported last week, mobile customers in the U.S. grew by 3.5% during the three months to 65.5 million.
T-Mobile US generated €1.91 billion in adjusted EBITDA, up 55.8% on-year.
Deutsche Telekom’s domestic business brought in €5.45 billion in revenue, down by 2.5%. Half of the decrease is attributable to the reduction in the low-margin distribution business with mobile devices, the telco said. Adjusted EBITDA in Germany decreased by 1.4% to €2.18 billion.
The operator saw its mobile customer base in Germany grow by 0.7% during Q1 to 40.64 million, with contract customers accounting for 23.94 million, up by 1%.
Fixed lines declined by 0.7% to 20.09 million, but within that figure, retail IP-based connections grew by 8.5% to 7.47 million. Broadband connections grew by 0.5% to 12.71 million, including a 12.4% hike in fibre lines to 3.29 million. TV subscriptions were up by 2% to 2.74 million.
