Telekom increases once again - problem part delivers
At Telekom, things continue to run smoothly. The number of customers is growing, leading to higher revenues. In Europe, the company has achieved its best result so far. Investors are likely to be pleased with the high cash flow.
Supported by robust customer growth, Deutsche Telekom again took in more and earned more in the spring. The Bonn-based company also slightly raised its annual target for cash inflow. "All our businesses are running successfully," said CEO Tim Höttges.
The company's revenue increased by 4.3 percent year-on-year to 28.4 billion euros. The adjusted operating result rose by 7.8 percent to 10.8 billion euros. In Europe, the operating result was the highest in the company's history, with an increase of 8.9 percent.
The positive business development was driven, among other things, by the success of partner offers in mobile communications, which brought the Telekom around half a million new contract customers in Germany and the rest of Europe. In Germany, the TV business stood out with an increase of 114,000 customers. "The European Football Championship and the end of the Nebenkostenprivileg had a positive effect here." Since July 1, tenants have been able to freely choose their TV and cable providers.
Former problem area now growing
Another bright spot was the continued recovery of the former problem area T-Systems. The IT services subsidiary's order intake grew by more than a quarter to 957 million euros. One of the drivers is the cloud business. Together with Google, a subsidiary of Alphabet, T-Systems is building a so-called sovereign cloud, where all user data remains in Germany or the EU.
Due to increasing digitization, data centers for cloud applications are becoming increasingly important. This trend is reinforced by the triumph of artificial intelligence (AI), which requires high-performance computers.
At the same time, cash flow, which is seen as a measure of dividend payout, increased by almost half to 5.2 billion euros. Analysts had only expected 4.5 billion euros. Therefore, Telekom is now targeting a cash inflow of 19 billion euros for the full year.
The reason for this is, among other things, lower expenses, especially in the USA. The US mobile subsidiary T-Mobile has almost completed the integration of the acquired rival Sprint. In addition, investments in the 5G mobile network there have decreased, it was said. For this reason, T-Mobile has also raised its forecast for cash inflow.
The company's impressive financial performance includes a significant increase in cash flow, now targeting 19 billion euros for the full year, largely due to the improved performance of subsidiaries like T-Mobile in the USA and the successful integration of Sprint. In the context of this robust financial growth, investors will undoubtedly take note of the strong quarterly figures, which will be announced in the forthcoming financial reports.
