Deutsche Telekom maintained its outlook for full-year growth, despite a small slowdown in growth in the second quarter compared to the first three months of 2016. The German operator reported second-quarter revenues up 2.2 percent year-on-year to EUR 17.8 billion, led by the customer growth at T-Mobile US.
On an organic basis, adjusted for exchange rate effects, revenue increased by 3.9 percent. DT said its decision to reduce the low-margin handset distribution business in Germany took around 0.7 percent off revenue. Sales in Germany fell 3.1 percent to EUR 5.4 billion, of which around 2 percent came from the change in handsets, while the US grew 10.1 percent to EUR 8.2 billion. In the rest of Europe, revenue fell 3.2 percent to EUR 3.1 billion, or 1.2 percent excluding forex effects.
Group adjusted EBITDA increased by 8.6 percent to EUR 5.5 billion and rose 9.9 percent on an organic basis. The improvement in EBITDA was partially offset by higher depreciation and amortization, mainly as a result of the further roll-out of LTE and handset leasing the US. This led to a drop in net profit to EUR 621 million from EUR 712 million a year ago.
Free cash flow fell 4.0 percent to EUR 1.3 billion, hurt by no more dividends from EE, while capital expenditure rose 3.5 percent to EUR 2.7 billion, excluding spectrum. Deutsche Telekom said the positive development in the second quarter supports its guidance for the full year, for an increase in revenue and adjusted EBITDA up over 6 percent.
