Germany's United Internet has confirmed its full-year growth outlook after a solid increase in first-half results. Revenues rose 10.9 percent year-on-year to EUR 2.549 billion on a pro forma basis for its acquisitions of Strato and Drillisch, and EBITDA increased 10.8 percent to EUR 565.5 million on the same basis. For the full year, United Internet expects revenues to grow to EUR 5.2 billion and EBITDA of EUR 1.2 billion.
The company said revenues in the first half received a boost from the adoption of IFRS 15. However this was nearly completely offset by extra costs for strong smartphone and contract customer sales. In addition, the company booked EUR 13.9 million in integration costs.
EPS dropped to EUR 0.91 from EUR 0.96 a year ago, excluding the year-earlier impairment charge on Rocket Internet. Net earnings were hurt by increased minority interests after Warburg Pincus took a stake in the Business Applications division and for minority shareholders in 1&1 Drillisch. In addition, there were increased writedowns for the acquisition of Versatel and the Strato and Drillisch takeovers in 2017. Without these purchase price accounting writedowns, EPS rose from EUR 1.05 to EUR 1.16, the company said.
United Internet said growth in the mobile market was slightly slower than expected in H1 due to the price war in the mobile discount segment that started in May. The mobile business grew by 430,000 contracts in the six months to 8.73 million at the end of June, with growth slowing to 190,000 additions in Q2. The number of DSL contracts increased by 40,000 in the first half and just 10,000 in Q2 to 4.38 million.
The company said it expects the growth of around 500,000 contracts per half year to continue, leading to around 13.64 million contracts at the end of 2018, mobile and DSL included. United Internet said it decided not to participate in the "fiercer price competition" in the mobile discount segment since May and as such is not increasing its sales guidance further for the year.
Revenues for the Access division were still up 35 percent in the second quarter to just over EUR 1 billion, helped by the formation of 1&1 Drillisch as well as underlying growth at the business division 1&1 Versatel. The Applications division grew Q2 sales 4.8 percent to EUR 277 million. Consumer Applications accounts dropped by 0.2 million to 38.05 million in June, due entirely to fewer free accounts, while Business Applications accounts grew by 0.2 million in the same period to 8.07 million.
