Deutsche Telekom reported a surge in second-quarter results following its takeover of US operator Sprint. Revenues rose 37.5 percent to EUR 27.0 billion, and adjusted EBITDA AL jumped 56.4 percent to EUR 9.8 billion. Adjusted for the takeover and currency effects, revenues were down 0.6 percent, and EBITDA increased 8.4 percent.
Telekom said the coronavirus crisis had a limited impact on the results. The effects were primarily felt in the corporate customer business, where new orders slowed, and in mobile roaming revenues, which came under pressure as a result of travel restrictions. In Germany, quarterly revenues were still up 1.1 percent to EUR 5.4 billion, while the rest of Europe declined 4.5 percent to EUR 2.8 billion, and System Solutions dropped 3.4 percent to EUR 1.6 billion.
Net profit fell 20.1 percent to EUR 754 million. Telekom noted that the increase in non-controlling interests as well as integration costs for Sprint will impact results in the first years after the acquisition. Free cash flow AL jumped 56.9 percent to EUR 2.4 billion, while cash capex increased a slower 8.3 percent to EUR 4.5 billion.
The company updated its guidance for the full year to take account of the merger in the US. It now expects adjusted EBITDA AL of around EUR 34 billion in 2020, up from the previous guidance of EUR 25.5 billion, while the forecast for free cash flow AL was cut to a minimum EUR 5.5 billion versus around EUR 8.0 billion before, due to the integration costs in the US. Telekom noted that all other guidance outside the US is unchanged.
