Brilliant business in the USA and a strong dollar have gilded Deutsche Telekom's results. And the growth should continue. Shareholders can look forward to a higher dividend.
Thanks to the strong dollar, Deutsche Telekom earned more than ever last year. She benefited from the booming business at the US subsidiary T-Mobile. "The American story is 100 percent and more," said company boss Tim Höttges in Bonn. T-Mobile gained more than four times as many customers last year as the Bonn-based parent company. In addition, the US mobile operator is now reaping the fruits of its merger with rival Sprint. In the current year, synergies would grow by a fifth to up to $7.5 billion, while integration costs would fall by a good 80 percent to less than $1 billion.
In addition, the planned takeover of a majority stake in T-Mobile is within reach. Höttges did not want to give a timeframe for when the participation, which is currently 49.6 percent, will exceed this threshold. "But that will come as surely as amen in church."
Höttges also sees his company on the right track when it comes to achieving the medium-term goals set for 2021. The current numbers are at the upper end of the targeted range and in some cases above it. Last year, sales rose by 6.1 percent to a record high of 114.4 billion euros. Adjusted operating profit also reached a record level of EUR 40.2 billion. The bottom line is that the Telekom group earned almost twice as much at around eight billion euros.
"The annual report and the outlook basically confirm our positive view of things," commented DZ Bank analyst Karsten Oblinger. He reiterated his buy recommendation for the t-share. It rose by up to 1.4 percent and, at EUR 21.40, was as expensive as it was almost 22 years ago.
In the current year, the people of Bonn want to earn even more. The operating result including leasing costs is expected to increase by four percent to almost 41 billion euros. Because the group closed the Netherlands business last year and sold the radio tower subsidiary GD Towers, it uses a pro forma value from the previous year as a basis. On this basis, the free inflow of funds should climb by at least 40 percent to more than 16 billion euros.
In view of the brilliant figures, the Telekom shareholders can hope for further increasing dividends. Because the profit, which is relevant for the distribution and adjusted for one-off effects, is expected to rise to EUR 1.60 from EUR 1.50 per share in 2023, the company predicted. EUR 0.70 per share is to be paid for the past year, after EUR 0.64 most recently.
On the subject of network expansion, Höttges said that 95 percent of the population in Germany would be reached with the fast 5G mobile communications standard. With fast Internet via fiber optics, 1.35 million households in Germany are now reached.
Telekom competitor Vodafone had disappointed with its business figures at the beginning of the month. The British group also announced that it would cut 500 jobs at its headquarters. Telefonica Deutschland, on the other hand, achieved record results thanks to a sustained strong influx of customers.
