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Deutsche Telekom Q4 net profit 1.33 billion euros

Staff Writer |
Deutsche Telekom reported a decline in fourth-quarter EBITDA, a key earnings metric, with weak revenues.

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However, the company recorded a net profit, compared to loss last year on positive U.S. tax effect. Deutsche Telekom lifted its dividend and said it expects higher earnings in fiscal 2018.

The company said it made record-level investments worldwide of over 12 billion euros, of which 5.4 billion euros were in Germany.

CEO Tim Höttges said, "Deutsche Telekom continues to grow in its global markets. ...We also want our shareholders to profit from our success, which is why we are planning to increase the dividend for the third time in succession."

For the fourth quarter, net profit was 1.33 billion euros, compared to last year's loss of 2.12 billion euros. The company noted that several factors contributed to the profit, including a positive non-recurring effect from the tax reform in the United States totaling 1.7 billion euros in the fourth quarter.

Adjusted net profit was 2.66 billion euros, compared to 973 million euros last year.

EBITDA declined 3 percent to 4.7 billion euros, and adjusted EBITDA dropped 4.7 percent to 5.02 billion euros.

Net revenue dropped 2 percent to 19.16 billion euros from 19.54 billion euros in the prior year. Revenue in the Germany operating segment increased 2 percent to 5.68 billion euros.

For the year, revenues grew 2.5 percent on a reported basis, while organic revenue growth was 3.6 percent with growth across Europe in broadband, mobile communications, TV, and convergence products.

In the full-year 2017, T-Mobile US revenue increased 8.1 percent to $40.3 billion. T-Mobile US added 5.7 million new customers in the year.

Further, the company said its Supervisory Board and the Board of Management will propose to the shareholders' meeting on May 17 a dividend of 65 euro cents per share. This increases the dividend by 5 euro cents per share from 2016. All in all, this represents a 30-percent increase over three years.

Looking ahead to fiscal 2018, Deutsche Telekom forecast adjusted EBITDA to grow 4 percent to around 23.2 billion euros and free cash flow to increase 12 percent to around 6.2 billion euros.

Deutsche Telekom said it expects to see high growth rates across all key financial performance indicators for the four years from 2015 through 2018. Adjusted EBITDA is set to grow on average by some 5 percent a year on this basis. The increase in free cash flow averages around 11 percent a year.

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