For the first quarter ending March 31, net income was 169m euros ($200m) down from 853m euros ($1.01bn) in the year-ago quarter. It should be noted that the year-ago figure was inflated by asset sales and a tax gain. Sales meanwhile were up 2.7% at 13.99bn euros ($16.55bn).
During the quarter, Deutsche Telekom was hit with another charge of 148m euros ($175m) to cover problems with Toll Collect – the troubled road-charging system for trucks developed with DaimlerChrysler and Cofiroute of France – after the venture’s new management revised its budget.
This is second time Deutsche Telekom has been hurt by the ongoing difficulties with the project. In the fourth quarter of 2003, it was hit with a 442m euro ($522m) charge to cover losses at Toll Collect.
Deutsche Telekom was however boosted by wireless sales, especially in the US. The T-Mobile International AG division is Deutsche Telekom’s main growth driver and is also the world’s fourth-largest mobile-phone company by clients. During the quarter it won 8.3 million new users, bringing the total to 63.4 million and boosting sales 12% to 5.94bn euros ($7.01bn).
Sales at T-Mobile USA Inc jumped 23% to 2.1bn euros ($2.48bn) The US unit added 1.2 million new users, increasing its customer base there to 14.3 million.
The results continue to highlight the increasing importance of the mobile phone business to Deutsche Telekom. This is especially true when looking at its fixed-line unit T-Com, which while remaining the principle cash-cow, continued to suffer from the effects of Germany’s fragile economy. This coupled with domestic competition in the local calls market brought a 6% decline in sales at the unit.
Net debt has fallen further, by 2bn euros ($2.36bn) to 44.6bn euros ($52.62bn). In the past year the company has managed to lower its debt mountain by a total of 11.7bn euros ($13.80bn).
