Deutsche Telekom reported annual results below its earlier guidance and blamed the shortfall on negative currency effects and asset writedowns. Revenues fell 6.0 percent to EUR 58.7 billion, led by lower sales in its main markets Germany and the US, and adjusted EBITDA declined to EUR 18.7 billion from EUR 19.5 billion, short of the company's target for EUR 19.1 billion. Net profit plunged to EUR 557 million from EUR 1.7 billion in 2010, as EUR 3.3 billion in impairment charges on its US and southeast Europe operations more than offset the USD 3 billion received from AT&T for ending their acquisition deal. Free cash flow came in at EUR 6.4 billion, just short of the outlook for EUR 6.5 billion, and the operator left its dividend unchanged at EUR 0.70 per share, or 47 percent of free cash flow. Deutsche Telekom reduced capex by 14.7 percent last year to EUR 8.4 billion, while net debt fell 5.1 percent to EUR 40.1 billion. The operator said it was ahead of schedule on its cost reduction programme Save for Service, with total savings of EUR 4.5 billion at the end of 2011, versus the target of EUR 4.2 billion by end-2012. The helped the adjusted EBITDA margin improve half a point to 31.8 percent in 2011. For 2012, Deutsche Telekom said it expects another challenging year, with adjusted EBITDA dropping to around EUR 18 billion and free cash flow falling to EUR 6 billion. This includes extra costs for the launch of LTE services in the US.
