Deutsche Telekom reports profit slump despite boom in US business

 German telecoms giant Deutsche Telekom posted a surprise fall in second-quarter profit on Thursday despite a surge in sales in the United States.

Net profit dropped 12.8 per cent to a lower-than-forecast 621 million euros (693 million dollars) in the three months to the end of June compared with 712 million euros the same quarter last year, Telekom said. Analysts had expected a rise to 840 million euros.

However, the Bonn-based company said that it was sticking to its full-year forecast of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), coming in at 21.2 billion euros.

The forecast represents a 6-per-cent increase compared with 2015.

Telekom also expects revenue to increase in both 2016 and 2017. Second-quarter adjusted EBITDA climbed 8.6 per cent to 5.46 billion euros.

The company's booming US business resulted in group revenue climbing by 2.2 per cent to 17.82 billion euros.

The rise in revenue came despite a more-than 3-per-cent slump in revenue in Telekom's home market in Germany in the face of tough domestic competition and after mobile phone service revenue contracted by 0.8 per cent.

Last month, Telekom's US arm, T-Mobile raised its full-year projection for an increase in subscribers after reporting an 890,000 rise in customers during the second quarter.

Group shares opened 0.5 per cent higher on the Frankfurt Stock Market.

Last update: Thu, 11/08/2016 - 09:58

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