Frankfurt am Main (AFP) – Network operator Deutsche Telekom reported Thursday tumbling profits but higher revenues in 2018, saying the smaller bottom line was down to the previous year’s one-off lift from US tax cuts and sticking to its forecasts for 2019.
Net profit at the Bonn-based giant fell 37.4 percent, to 2.2 billion euros ($2.4 billion).
Operating, or underlying profit also dropped 8.9 percent, to 21.8 billion euros, although revenues grew 0.9 percent to reach 75.7 billion.
Lower net profit was “primarily attributable to the positive one-time effects of the US corporate tax reform” in 2017, Telekom said in a statement.
Nevertheless, “we kept our promises and continued to grow in 2018,” chief executive Tim Hoettges said.
In home market Germany, the group said it added customers both on mobile connections and fibre-optic home broadband, with operating profits rising despite falling revenues.
Meanwhile both revenues and operating profit grew elsewhere in Europe, as more people matched the German trend by opting for contracts combining a mobile phone and home internet connection.
And T-Mobile US remained a powerful growth motor for the firm, adding more than 7 million customers year-on-year.
Revenue at the unit grew by a similar amount, to $43.1 billion (38 billion euros), while operating profit increased almost twice as fast, rising 13.6 percent to reach $11.9 billion.
Telekom highlighted a “steady rise in the loyalty of existing customers” in America, as it slashed its so-called “churn rate” of departing subscribers to one percent.
Looking to the year ahead, the group said it would stick to a forecast path set last year of average annual increases in revenue of between one and two percent until 2021.
Over the same period, adjusted operating profit is projected to add between two and four percent each year.
Telekom also plans to increase its dividend for last year, to 70 euro cents per share compared with 65 paid out for 2017.
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