German telecoms group Deutsche Telekom on Thursday confirmed its financial objectives for the year, after a strong performance by its US mobile arm boosted business in the first quarter.
Deutsche Telekom increased revenue by 5.8 percent to 18.6 billion euros ($20.2 billion) between January and March compared with the same period last year, but an accounting effect slashed net profit by 76 percent to 747 million euros.
In 2016, first-quarter profits had been boosted by the sale of British mobile operator EE.
So, adjusted to remove that one-off gain, Deutsche Telekom calculated that net profit fell by a much narrower 10.3 percent in the January-March period.
The drop was “mainly due to expenses incurred to restructure the financing of T-Mobile US in the first quarter,” it explained.
Nevertheless, overall business remained healthy, with underlying or operating profit rising by 7.5 percent to 5.6 billion euros, Deutsche Telekom said.
German and European operations remained almost flat in the first three months, booking increases in revenue of less than 1.0 percent, while T-Mobile US added 1.1 million new subscribers, lifting revenues by 14.9 percent.
“After a glance across the Atlantic, I can only say that our investments in the United States have paid off,” chief executive Tim Hoettges said.
“The positive trends remain unbroken: We are growing in the United States and have recently returned to growth in Germany. We got off to a good start in 2017,” the CEO said.
Bolstered by its first-quarter performance, Deutsche Telekom said it remained confident of meeting its objectives for the year, forecasting adjusted operating profit of around 22.2 billion euros, up from the 21.4 billion earned in 2016.
–AFP