Deutsche Telekom upbeat on strong second-quarter

8th Aug 2024 07:14

(Sharecast News) - Deutsche Telekom has reported a strong second quarter on Thursday, continuing its steady growth trajectory.

The telecommunications giant said net revenue increased 4.3% to €28.4bn, with service revenue rising 4.9% to €24.1bn.

Adjusted EBITDA grew 7.8% year-on-year, reaching €10.8bn, while free cash flow saw a significant boost, surging 48.5% to €5.2bn.

That prompted the company to raise its full-year guidance for free cash flow to approximately €19.0bn, up from the previous estimate of €18.9bn.

Net profit for the quarter was also strong, increasing 35.6% to €2.1bn, while adjusted net profit rose 31.3% to €2.5bn, translating to an adjusted earnings per share of 50 euro cents.

"All our operations are performing well," said chief executive officer Tim Höttges.

"Quarter by quarter, we are seeing our strategy pay off."

In Germany, Deutsche Telekom said it experienced robust customer growth, particularly in fibre-optic and mobile services.

The number of pure fibre-optic customers increased by 113,000, bringing the total to over 1.2 million.

Mobile contract customers grew by 311,000, contributing to a 3.7% increase in mobile service revenues.

Revenue in the German segment rose 3.6% to €6.4bn, although adjusted EBITDA growth was limited to 1%, partly due to a one-time employee payment.

T-Mobile US meanwhile reached a significant milestone, surpassing 100 million postpaid customers for the first time.

The company added 1.3 million postpaid customers in the quarter, including 777,000 postpaid phone additions.

It also saw a 9.1% increase in adjusted EBITDA to $7.8bn, with service revenue rising 4.4% to $16.4bn.

In Europe, Deutsche Telekom's earnings grew at a record pace, with adjusted EBITDA up 8.9% to €1.1bn.

Organic revenue growth was 6.8%, driven by continued customer growth in mobile, broadband, and television services.

However, the company said it anticipated a slowdown in growth during the second half of the year due to diminishing benefits from lower energy costs.

The systems solutions segment also performed well, with order entry rising 28.3% to €957m.

Revenue increased 2.1% to €981m, fuelled by strong demand for cloud services and digitalisation solutions, while adjusted EBITDA grew 1.4% in organic terms to €87m.

At 1113 CEST (1013 BST), shares in Deutsche Telekom were up 2.05% in Frankfurt at €24.41.

Reporting by Josh White for Sharecast.com.