Revenue increased 15% to €25.8B, but depreciation and amortization relating to newly consolidated companies causes a stunning net loss

August 21, 2002

3 Min Read

BONN, Germany -- Deutsche Telekom has continued its growth course in the first half of 2002 and achieved satisfactory results in a difficult environment. Group revenue increased by almost 15 percent to EUR 25.8 billion (first six months of 2001: EUR 22.5 billion). Revenue generated outside Germany increased from 27 percent to 33 percent. Group EBITDA (excluding special influences) increased by 7.2 percent to EUR 7.8 billion. Net loss totaled EUR 3.9 billion, primarily a result of depreciation and amortization relating to newly consolidated companies. Excluding special influences, the net loss amounted to EUR 3.1 billion. As part of the extensive package of measures to reduce the Group’s debt, investments in property, plant and equipment were reduced by 17.6 percent to EUR 3.1 billion compared to the same period last year. This reduction in capital expenditure has considerably contributed to the increase in net cash provided by operating activities of 40.8 percent to EUR 6.6 billion.Chairman of the Board of Management, Prof. Dr. Helmut Sihler, called the results encouraging and, all in all, highly satisfactory against the backdrop of the general economic situation. According to Sihler, Deutsche Telekom also has a solid market position and one from which it can expand. "We know what we have to achieve and we see clearly the path we must take. The combined efforts of all those responsible in the company, and by this I mean all employees, will ensure that we reach our goal despite the unfavorable environment", stated Sihler. Sihler named the review of the corporate strategy as one of the urgent tasks facing Deutsche Telekom’s Board of Management. An important aim of this shall be to further develop operational strengths. Sihler announced that the results of this review process shall be made known in November. E3 – the program which is already underway to improve the company’s results by means of measures to generate savings and greater efficiency – will, according to Sihler, achieve sustained improvements in the order of EUR 1.5 billion by reducing capital expenditure and workforce numbers. The new Chairman reaffirmed the aim of reducing Deutsche Telekom’s net debt to EUR 50 billion by the end of 2003. Thanks to the improved cash flow, among other things, it has already been possible to reduce net debt by EUR 3.1 billion to EUR 64.2 billion in the second quarter of 2002. CFO Dr. Karl-Gerhard Eick emphasized this point: "Our net debt has been reduced by almost EUR 7 billion compared to the same period last year. This is proof of the progress we have already made in debt reduction."T-Mobile once again primary growth driver: Segment reporting for the company’s four divisions once again reveals T-Mobile to be the primary source of growth within the Group, with the majority shareholdings of the T-Mobile Group accounting for net additions of around 5.7 million subscribers compared with June 30, 2001. Market leadership in Germany was further expanded. The U.S. company VoiceStream was also highly successful and its development exceeded expectations. The second quarter alone saw VoiceStream register around 526,000 net customer additions, representing a disproportionately high share of market growth. T-Mobile’s total revenue increased by 53 percent to EUR 9.14 (5.97) billion, largely due to companies that were not consolidated for the entire first six months of 2001. EBIDTA for this segment increased by 86 percent to EUR 2.56 (EUR 1.38 billion). Deutsche Telekom AG

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