“All deals successful”
Telekom gains once again – problem division delivers
08.08.2024, 08:37
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Things are continuing to run smoothly at Telekom. The number of customers is growing, resulting in higher revenues. In Europe, the company has posted its best results to date. Investors should be pleased with the high cash flow.
Supported by robust customer growth, Deutsche Telekom once again increased its revenue and earnings in the spring. The Bonn-based company also slightly raised its annual target for cash inflow. “All of our businesses are running successfully,” said company boss Tim Höttges.
According to the information, group sales rose by 4.3 percent to 28.4 billion euros over the year. Adjusted operating profit increased by 7.8 percent to 10.8 billion euros. In the European business, operating profit was higher than ever before in the company’s history, with an increase of 8.9 percent.
The positive business development was driven, among other things, by the success of the partner offers in mobile communications, which brought Telekom a total increase of around half a million contract customers in Germany and the rest of Europe. In the German home market, the TV business stood out with an increase of 114,000 customers. “The European Football Championship and the end of the ancillary costs privilege had a positive effect here, among other things.” Since July 1, tenants have been able to freely choose their TV and cable providers.
Former problem sector is now growing
Another bright spot was the ongoing recovery in the once troubled T-Systems division. The IT services subsidiary’s order intake grew by more than a quarter to 957 million euros. One of the drivers is the cloud business. The Telekom subsidiary, which was due to be sold a few years ago, is building a so-called sovereign cloud together with the Alphabet subsidiary Google, in which all user data remains in Germany or the EU.
Due to increasing digitalization, data centers are becoming increasingly important for cloud applications. This trend is being reinforced by the triumph of artificial intelligence (AI), which requires high-performance computers.
At the same time, cash flow, which is considered a barometer for the dividend amount, increased by almost half to 5.2 billion euros. Analysts had only expected 4.5 billion euros. Telekom is therefore now aiming for a cash inflow of 19 billion euros for the full year.
The reason for this is lower expenses, especially in the USA, in addition to increased profits. The US mobile phone subsidiary T-Mobile has now largely completed the integration of the acquired rival Sprint. In addition, investments in the 5G mobile network there have declined, it said. For this reason, T-Mobile had also raised its forecast for cash inflow.