Deutsche Telekom Lifts FY22 View Despite Weak Q2 Profit; Stock Up

Shares of Deutsche Telekom AG were gaining more than 1 percent in the morning trading in Germany after the telecom major on Thursday raised its fiscal 2022 earnings outlook again, despite reporting lower profit in its second quarter. Adjusted EBITDA AL, a key earnings metric, increased, while adjusted EBITDA AL margin dropped.

Citing the sound first-half business performance, the company now expects adjusted EBITDA AL for the year of 2022 around 37 billion euros, higher than previously expected more than 36.6 billion euros.

Further, Deutsche Telekom expects the free cash flow AL to come in at the recently raised guidance of over 10 billion euros, upping the guidance for business outside of the United States to 3.8 billion euros from previously expected 3.7 billion euros.

For the second quarter, net profit fell 22.3 percent to 1.46 billion euros from 1.88 billion euros a year ago. Earnings per share were 0.29 euro, down 27.5 percent from 0.40 euro a year ago.

Adjusted net profit was 2.45 billion euros, compared to 2.11 billion euros last year. Adjusted earnings per share were 0.49 euro, compared to prior year’s 0.45 euro.

Profit from operations or EBIT declined 36.1 percent from last year to 2.36 billion euros. EBITDA of 9.93 billion euros declined 5.2 percent and EBITDA AL of 7.45 billion euros declined 15.2 percent.

In the quarter, adjusted EBITDA grew 5.5 percent to 11.48 billion euros, and adjusted EBITDA AL went up 5 percent from last year to 9.9 billion euros.

Adjusted EBITDA AL margin, meanwhile, fell to 35.1 percent from 35.4 percent a year ago.

Net revenue grew 5.9 percent to 28.17 billion euros in the second quarter of 2022 from last year’s 26.59 billion euros.

Service revenue went up 10.8 percent year-over-year to 22.89 billion euros.

In Germany, Deutsche Telekom shares were trading at 19.09 euros, up 1.2 percent.

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