Deutsche Telekom swings to profit in Q2

Deutsche Telekom AG (DT) reported Thursday a net profit in the second quarter, following moves by the German telecommunications group to lower operating costs and improve earnings in its Internet and mobile units.

Europe’s largest telephone company saw second-quarter net profit increase to 256 million euros (US$293 million as of June 30, the last day of the period being reported) from a loss of 2.1 billion euros in the year-earlier period, the company said in a statement.

Second-quarter revenue rose to 13.6 billion euros from 13 billion euros a year earlier.

Net debt at the end of June had fallen to 53 billion euros from 56.3 billion euros at the end of March.

“We are delivering the results that we have promised,” DT Chief Executive Officer Kai-Uwe Ricke said at a news conference. “They are the result of a difficult restructuring that has demanded much from management and staff.”

Net profit in the first half-year rose to 1.1 billion euros from a loss of 3.9 billion euros year on year, while revenue for the same period increased to 27.2 billion euros from 25.6 billion euros.

Half-year earnings before interest, taxes, depreciation and amortization (EBITDA) increased 27.2 per cent to 9.6 billion euros from 7.6 billion euros year on year.

Ricke said the mobile and Internet units were major contributors to the group’s improved financial performance .

T-Mobile International AG & Co. KG posted sales of 5.6 billion euros in the second quarter compared to 4.7 billion euros a year earlier. The mobile unit added 1.4 million customers in the second quarter, bringing the total customer base, including shareholdings in other mobile operators, to 61.4 million at the end of June.

T-Online International AG saw second-quarter sales soar 20.7 per cent to 449 million euros from 372 million euros in the same period a year earlier.

Despite the positive development of T-Mobile USA Inc., which saw an increase of 1.5 million customers in the first half-year, DT has no plans to acquire additional licenses in the U.S., Ricke said. The U.S. subsidiary had more than 11 million customers at the end of June, he said.

As for acquisitions in general, Ricke said the Germany company is currently “not in an acquisition mode.”

Asked when T-Mobile planned to roll out commercial third-generation (3G) mobile broadband services, Ricke declined to give an exact date, saying only that the company would launch the service when it felt the network and handsets could provide the necessary quality .