German telecom giant Deutsche Telekom AG reported Friday strong growth in fourth-quarter profit mainly driven by T-Mobile US results following the takeover of the competitor Sprint. Looking ahead for fiscal 2021, the company projects higher adjusted EBITDA AL, a key earnings metric.
CEO Tim Höttges said, "We closed a groundbreaking deal in the United States, improved our market position in Europe and at the same time made an important contribution to managing the impact of the coronavirus pandemic with our stable networks."
For fiscal 2021, the company expects adjusted EBITDA AL of around 37 billion euros, higher than the 35.02 billion euros generated in fiscal 2020.
Free cash flow AL for the year is expected to total some 8.0 billion euros.
For the fourth quarter, net profit surged to 1.67 billion euros from last year's 654 million euros. Adjusted net profit was 1.64 billion euros, compared to 1.02 billion euros a year ago.
EBITDA climbed 66.4 percent to 11.05 billion euros from 6.64 billion euros last year. Adjusted EBITDA was 10.44 billion euros, up 48 percent from prior year's 7.05 billion euros.
Adjusted EBITDA AL for the quarter climbed 48.5 percent to 8.95 billion euros from 6.03 billion euros last year.
Net revenue increased 29.3 percent to 27.62 billion euros from prior year's 21.36 billion euros.
In fiscal 2020, net profit grew 7.5 percent from last year to 4.2 billion euros, and adjusted net profit increased 15.5 percent to 5.7 billion euros. Net revenue increased 25.4 percent to 101.0 billion euros driven primarily by the takeover of Sprint as of April 1, 2020. Organically, revenue grew 3 percent. Adjusted EBITDA AL increased 41.6 percent.
Telekom in Germany recorded 0.2 percent rise in annual revenue. At the end of the year, Telekom Germany reported 14.1 million broadband customers, 388,000 more than a year earlier.
In the U.S., the company recorded total revenues of 61.21 billion euros, up 51.4 percent. In dollar terms, revenue increased 55 percent to $70.1 billion. Adjusted EBITDA AL recorded an increases of 92.8 percent.
T-Mobile US recorded 1.7 million net customer additions in the fourth quarter. As of the year-end, the customer base totaled 102 million, up 50 percent against the end of 2019, driven primarily by Sprint acquisition.
Meanwhile, Europe revenues dropped 2.2 percent on a reported basis, and stable in organic terms.
In Germany, Deutsche Telekom shares were trading at 15.08 euros, up 0.77 percent.
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