Deutsche Telekom provided a positive outlook for growth in adjusted earnings this year, citing support from its operations in both the United States and Europe. However, the telecommunications giant reported a decline in net profit for the fourth quarter.
On Friday, Deutsche Telekom disclosed that adjusted earnings before interest, taxes, depreciation, and amortization after leases, a key metric in the industry, are expected to reach around 42.9 billion euros ($46.44 billion) in 2024, reflecting a 6% increase compared to the previous year.
Deutsche Telekom’s forward-looking projections paint a promising picture, with expectations of a notable 16% surge in free cash flow after leases, reaching a substantial EUR18.9 billion. This robust growth trajectory extends to adjusted earnings per share, forecasted to ascend by a commendable 10%, surpassing the EUR1.75 mark.
In the backdrop of these optimistic forecasts, the telecommunications behemoth’s fourth-quarter performance showcased a nuanced narrative. Despite posting a net profit of EUR1.83 billion, marking a decline from the previous year’s EUR1.99 billion, Deutsche Telekom demonstrated resilience amidst challenging market conditions. While overall revenue experienced a marginal downturn of 1.3%, amounting to EUR29.37 billion, the silver lining emerged in the form of service revenue, which witnessed a commendable uptick of 0.7%. This uptrend was notably driven by robust growth in the domestic German market and other strategic European regions, effectively offsetting the slight decline observed in the U.S. market.
Delving deeper into the financial landscape, Deutsche Telekom’s quarterly adjusted EBITDA after leases exhibited a modest uptick of 0.5%, reaching EUR10.01 billion. These figures, while reflective of a resilient operational performance, underscore the company’s adept navigation through a dynamic and competitive industry landscape.
Analysts’ consensus estimates, juxtaposed against Deutsche Telekom’s actual performance, provide insightful context. Forecasts anticipated a net profit of EUR1.63 billion, adjusted EBITDA after leases of EUR10.07 billion, and revenue totaling EUR28.49 billion. The company’s ability to surpass these expectations, albeit within a margin of nuance, attests to its strategic agility and operational prowess in delivering value to shareholders amidst evolving market dynamics.