Deutsche Telekom 2Q Profit Down 35%, Confirms Outlook

BONN -(Dow Jones)- Deutsche Telekom said Thursday second quarter net profit fell 35%, mainly on one-time effects and higher interest payments, and confirmed its outlook..

The former state telecom monopoly said net profit for the period ending June 30 was EUR394 million, down from EUR604 million a year earlier when the company booked a gain from the sale of T-Online France. Deutsche Telekom didn't specify the size of the gain.

Adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, which measures the company's operational performance, fell 1.1% to EUR4.85 billion.

Net revenue fell 2.9% to EUR15.13 billion, burdened by the strong euro against the U.S. dollar and sterling.

There was a negative effect on revenue in the first six months of the year amounting to EUR1.2 billion because of the strength of the euro, said a Deutsche Telekom spokesman. Deutsche Telekom has mobile operations in the U.S. and the U.K.

Deutsche Telekom also said free cash flow before dividend payments was EUR1.96 billion, up from EUR1.75 billion a year earlier.

Deutsche Telekom's second quarter results came in slightly above market consensus, which had called for revenue of EUR15.09 billion and adjusted Ebitda of EUR4.8 billion, according to a Dow Jones Newswires poll of 19 analysts.

Deutsche Telekom saw a further 7.1% decline in German fixed-line customers in the period, to 29.82 million at the end of the second quarter from 32.09 million. German retail broadband customers grew 23.5% on year to 9.9 million as of June 30.

Total mobile customers, meanwhile, grew 8.7% to 125 million, with the U.S. customer base up 12.3% on year and Europe up 7.5%.

In early reaction, traders said Deutsche Telekom's results were in line and the confirmed outlook should ease any investor concerns.

Deutsche Telekom shares closed Wednesday up 0.4% at EUR11.36.

-By Archibald Preuschat, Dow Jones Newswires, +49 (0) 69 29725505, archibald.preuschat@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 7th August 2008