Reviews Telekom share just in green: Deutsche Telekom better than expected in the fourth quarter

15:21  26 february  2021
15:21  26 february  2021 Source:   finanzen.net

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Thanks to the acquisition of Sprint in the USA, Deutsche Telekom AG once again achieved impressive growth in the fourth quarter and exceeded the analysts' forecasts.

Ralph Orlowski/Getty Images © Provided by Finanz.net Ralph Orlowski / Getty Images

But the DAX group also grew organically solid on this side of the Atlantic. The operating profit is expected to increase further in 2021.

In the fourth quarter of 2020, the group made a leap in sales with the acquisition of the former competitor Sprint and earned significantly more operationally than in the previous year. Revenue climbed 29.3 percent to 27.622 billion euros, and adjusted EBITDA AL by 48.5 percent to 8.952 billion euros. Analysts had expected both indicators to be 27.163 billion and 8.870 billion euros, respectively, lower.

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But also organically, i.e. without taking into account exchange rate effects and the Sprint purchase, Telekom was able to grow in the quarter: by 5.1 percent in sales and by 9 percent in adjusted EBITDA AL. These growth rates thus accelerated compared to the previous quarters.

The bottom line is that Telekom also grew rapidly from October to December. The adjusted net profit reached 1.643 billion euros, an increase of 61.7 percent. The result benefited, among other things, from the increased value of options to buy T-Mobile shares, which are currently still held by Softbank.

Unadjusted, consolidated net income rose to 1.671 billion euros from 654 million euros. The free cash flow AL fell by almost half to 942 million euros in the previous year due to the integration costs of Sprint.

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The already strong US business received an additional boost from the Sprint takeover. Sales in the USA soared by 59 percent to 17.2 billion euros, while the adjusted EBITDA AL reached 6.7 billion euros, an increase of 98 percent. Without taking into account the Sprint acquisition, which has been fully consolidated since April, T-Mobile US was in good shape: In the fourth quarter, US business grew organically by 8.8 percent; the adjusted EBITDA AL increased organically by 12.6 percent.

In Europe, Telekom shrank in sales due to unfavorable exchange rate effects by 2.9 percent to 2.992 billion euros, organically it went down by 0.5 percent. Adjusted EBITDA AL lost 0.4 percent to 0.958 billion euros. Organically, adjusted EBITDA AL rose by 1.9 percent despite the corona-related declines in roaming revenues. The fourth quarter of 2020 was thus the twelfth quarter in a row with organic earnings growth in the European business.

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In the home market of Germany, sales were 0.6 percent higher to 6.260 billion euros despite corona effects. Telekom lost fewer connections than it had in a long time and gained 121,000 broadband customers, the best figure in years. Adjusted EBITDA AL increased by 1.1 percent to 2.333 billion euros. In contrast, the systems business lost 7.4 percent of sales and adjusted EBITDA AL 16.2 percent.

In the year as a whole, Telekom increased its sales by 25 percent to 101 billion euros. The adjusted EBITDA AL was 35 billion euros, 42 percent above the previous year. The group result reached 4.2 billion euros. As announced, the dividend should only be at the minimum of 60 cents per share.

For 2021, the Bonn-based company announced an adjusted EBITDA AL of 37 billion euros, the free cash flow AL should reach 8 billion euros.

T-Share increases - "Strong key performance indicators"

The shares of Deutsche Telekom show themselves a little stronger on Friday after the presentation of quarterly figures. You gain 0.13 percent to 14.99 euros on XETRA at times. The analysts from JPMorgan and Jefferies especially praised the "very strong performance indicators" for the domestic market. The outlook is largely as expected, according to Jefferies expert Ulrich Rathe. Akhil Dattani from JPMorgan called it "mixed". FRANKFURT (Dow Jones / dpa-AFX)

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