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US Writedown Drives Deutsche Telekom Into Q3 Loss

Nov. 8, 2012

Europe's biggest telecoms group, Deutsche Telekom, said Thursday it slumped into loss during the third quarter following a 7.4 billion-euro (9.4 billion dollar) writedown on its troubled US operations.

The 6.9-billion-euro net loss during the three months to the end of September compared with a profit of 1.07 billion euros in the same period last year.

But the company's shares jumped 1.72 per cent in opening trading in Frankfurt after it confirmed its business outlook and proposed paying a dividend of at least 70 cents this year.

The 7.4-billion-euro charge resulted from the merger of its T-Mobile USA operations with Texas-based wireless group MetroPCS Communications, which was announced last month. Telekom is to retain a 74-per-cent stake in the merged group.

"We made a forward-looking decision for our US business in full awareness of the accounting consequences," chief executive Rene Obermann said in a statement.

"Anyone seeing only the clear net loss is overlooking the fact that our operating business is completely on track," he said.

Third quarter revenue slipped 0.1 per cent to 14.7 billion euros as the group attempted to build up its digital and mobile services in the face of intense competition in its domestic German market and the business fallout from Europe's debt crisis.

Adjusted earnings before interest, taxes, depreciation and amortization slipped 2.6 percent to 4.78 billion euros, Telekom said.



Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH


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