Expatica news

Telekom returns to the black

10 March 2004

BONN – Deutsche Telekom returned to the black in 2003 with a thin surplus of EUR 1.253 billion but company chief executive Kai-Uwe Ricke said Wednesday that no dividend would be paid as Telekom continues to cut its debts.

The surplus came after Telekom racked up huge record losses of EUR 24.6 billion in 2002 when the company took major restructuring and writedown charges.

Ricke said that Telekom will pay a dividend next year, with the company now confident that it has turned the corner financially, after 2003 had been a “very satisfactory” year.

“Our dual strategy of reducing debts on the one hand and promoting profitable growth on the other hand has paid off,” he said.

The one problem area had been the controversial satellite-based highway truck toll project Toll Collect, in which Telekom is partners with DaimlerChrysler and French company Cofiroute, with the system plagued by technical problems and running far behind schedule.

Ricke said that the Toll Collect problems had hurt Telekom’s earnings by some EUR 442 million last year, with the costs sending fourth-quarter results into the red EUR 364 million.

But he insisted that the Toll Collect project would be “made to succeed” together with Telekom’s partners.

His comments came after Telekom, in a report before stock market trading opened, said that the company’s pre-tax, interest and depreciation (EBITDA) earnings in 2003 rose to EUR 18.29 billion, up by 12.1 percent from EUR 16.3 billion in 2002.

Revenues, at EUR 55.84 billion, also surpassed by 4 percent the 2002 figure of EUR 53.7 billion, Deutsche Telekom said.

Meanwhile Telekom continued last year to cut its debts. At the end of 2003, the debts were just below EUR 46.58 billion, compared with EUR 61.1 billion twelve months earlier.

Subject: German news