Deutsche Telekom reported better than expected first-quarter core profit and sales on Thursday, helped by growth in Germany and the United States, though a writedown on its stake in BT weighed on its net profit. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) excluding special items rose 7.5 percent to 5.55 billion euros ($6 billion), above the average estimate of 5.48 billion euros in a Reuters poll.
"The positive trends remain unbroken: We are growing in the United States and have recently returned to growth in Germany," Chief Executive Tim Hoettges said in a statement. Revenue rose 5.8 percent to 18.65 billion euros, in line with expectations. In Germany, mobile revenues, excluding the impact of new rules on roaming and termination rates, rose 1.4 percent, underpinning overall sales growth in Germany of 0.2 percent to 5.4 billion euros.
Last month, T-Mobile US which is 64 percent controlled by Deutsche Telekom, reported a 2.7 percent rise in post-paid customers to 35.3 million at the cost of big rivals AT&T and Verizon, setting the unit up for a key role in expected consolidation in the US market. Net profit was hit by a 700 million euro writedown on Deutsche Telekom's 12 percent stake in BT. Shares in BT lost more than 10 percent during the first quarter as a result of an accounting scandal at its Italian unit.
Deutsche Telekom received its 12 percent stake in BT in exchange for its stake in British mobile operator EE last year, and has already written down 3 billion euros of its initial value of 7.4 billion. Deutsche Telekom confirmed its 2017 outlook for adjusted EBITDA of around 22.2 billion euros and free cash flow of 5.5 billion euros.
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