HomeFinance, Earnings and Market ReportsDT's Q1 earnings hit $10bn by organic growth - CFO

    DT’s Q1 earnings hit $10bn by organic growth – CFO


    EBITDA trellis outgrown by DT’s towering green shoots

    Deutsche Telekom’s (DT’s) chief financial officer has praised the company’s strong organic growth in the run up to spring as the latest quarterly statement was released for the German telco.

    “This was a strong start to the new year,” said CFO Christian Illek said in a company statement. “We are continuing to grow on an organic basis and are therefore in a position to raise our guidance for 2022.”

    The organics include the dead-heading of the Dutch business T-Mobile Netherlands, which was used to fertilise US division T-Mobile. Meanwhile, the new tower business is blooming, with a profit rise of 6.4% on last year, to €284 million. 

    Reuters reported that DT’s quarterly core profit and revenue surpassed analyst’s estimates. The German giant’s success was led by the performance of its US division, T-Mobile. This quarter DT has embarked on a strategy to buy its back shares in DT and beefing up its stake in this profitable unit. The sap is rising in its European business too and this organic growth has encouraged DT to revise its full-year outlook.

    Adjusted earnings before interest, tax, depreciation and amortisation after leases (EBITDA AL) were €9.87 billion ($10.26 billion), shooting over the trellis created by a poll of analyst expectations, which was set at just €9.55 billion. The telco’s first-quarter revenue increased by 6.2% to €28 billion, which again outgrew the consensus of €27.87 billion that came from the greenhouses of Frankfurt, Wall Street and the City of London.

    The company now expects to post adjusted EBITDA AL of more than €36.6 billion in 2022, up from the previous guidance of around €36.5 billion.

    Last month, Deutsche Telekom bought additional shares in T-Mobile from SoftBank for €2.3 billion ($2.4 billion), raising its stake in the U.S. company to 48.4% and within touching distance of a majority stake. The US mobile operator T-Mobile contributes three-fifths of its group revenue and netted all of a rival’s subscribers in a merger with Sprint. With that added momentum of scale it is rolling out its 5G service. 

    In the latest quarter, T-Mobile added 1.3 million customers who pay their bills monthly, lifting its subscriber base to 109.5 million customers. Deutsche Telekom reported 54 million mobile customers in Germany and 45.6 million in the rest of Europe.

    The sale of T-Mobile Netherlands was completed on March 31. This means that the Dutch business is included in the group’s figures for the last time. In the first quarter, T-Mobile Netherlands added 47,000 new mobile contract customers, generated revenue of €536 million and adjusted EBITDA AL of €190 million.

    In the radio tower business, there was an organic increase in sales compared to the same period of the previous year of 6.4 percent to €284 million. At the same time, adjusted EBITDA AL grew organically by 10.2 percent to €173 million. On a comparable basis, the number of locations was 40,500, 1,000 more than a year earlier.