Deutsche Telekom AG only issued its prospectus for flotation in November, but it appears to have colluded with its advisors in holding something back – by that time, it should have had a pretty accurate picture of the out-turn for the year, yet it was able yesterday to surprise the market by saying that business in 1996 was better than expected. The company, whose shares have been languishing very close to the issue price, announced that group sales rose nearly 6% to the equivalent of $38.7bn on an adjusted basis, and that profit had beaten the company’s forecasts, although we can’t expect to see that number until March, or even May. The desired effect was achieved and the shares rose as high as 31.69 marks in Frankfurt and closed at 31.56 marks, up 1.41%. Deutsche Telekom sales in the first half of 1996 were hit by two factors: it became liable for value added tax for the first time but decided not to pass on the charge to customers, and the 6% rise in revenue for 1996 is calculated by assuming the company paid tax in 1995; the other special factor was a tariff rebalancing, which lowered long-distance calls but raised local calls, which reduced call volumes.
