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UPDATE 1-Deutsche Telekom raises guidance after strong Q1

05/12/2021 01:14
UPDATE 1-Deutsche Telekom raises guidance after strong Q1

DT raises outlook for Europe following T-Mobile hike

Revenue, profit lifted by one-off impact of Sprint deal

Organic Q1 revenue up 7.1%, core profit up 8.3%

Results ahead of consensus estimates

Adds detail on Q1 results

- Deutsche Telekom DTEGn.DE on Wednesday raised its profit guidance for 2021 after a strong showing by its businesses in the United States and Europe in the first quarter, with group revenue and core profit beating market estimates.

“We are sustaining momentum and continuing our successful growth story,” said Chief Financial Officer Christian Illek. “Our customer numbers and key financial metrics are on track on both sides of the Atlantic.”

Following a guidance raise by U.S. unit T-Mobile TMUS.O, which has already reported results, Deutsche Telekom also nudged up the outlook for profit and cash flow at its European operations for the year. nL4N2MR3B4

It now expects group adjusted earnings before interest, depreciation, taxation and amortization after leases (EBITDA AL) to exceed 37 billion euros ($44.8 billion) and free cash flow after leases to exceed 8 billion euros.

Previously core profit had been seen at around 37 billion euros and free cash flow at around 8 billion.

First-quarter revenue increased by 32.3% to 26.39 billion euros ($32 billion), beating consensus estimates of 25.595 billion euros in a poll of analysts published by the company.

EBITDA AL rose 41.3% to 9.245 billion euros, also topping market expectations.

After stripping out one-off gains from T-Mobile's acquisition of smaller U.S. rival Sprint, which closed just over a year ago, revenue grew by 7.1% in the quarter and adjusted EBITDA AL by 8.3% on an organic basis.

The one-off effects will drop out of the equation from the second quarter.

($1 = 0.8251 euros)

(Reporting by Douglas Busvine, editing by Emma Thomasson)

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