STOCKHOLM (Reuters) – Deutsche Telekom lifted its annual outlook for the second time and posted quarterly core profit above estimates on Thursday, supported by upbeat performances in its U.S. unit T-Mobile along with growth in its European business.
Adjusted earnings before interest, tax, depreciation and amortisation after leases (EBITDA AL) rose to 9.9 billion euros ($10.19 billion), beating consensus estimates of 9.84 billion euros in a poll of analysts published by the company.
The telecoms operator’s second-quarter revenue rose 5.9% to 28.2 billion euros, in line with consensus estimates.
The company now expects to post adjusted EBITDA AL of around 37 billion euros in 2022, up from the previous outlook of more than 36.6 billion euros.
Deutsche Telekom, which has been trying to cut a debt pile of almost 136 billion euros, is selling its tower business to free up funds to invest in infrastructure and secure control of its U.S. business T-Mobile.
Last month, it agreed to sell 51% of its towers business to a consortium of Canada’s Brookfield and U.S. private-equity firm DigitalBridge, valuing the unit at 17.5 billion euros.
Deutsche Telekom bought additional shares earlier this year in T-Mobile from Japanese conglomerate SoftBank for $2.4 billion, raising its stake in the U.S. company to 48.4%, within touching distance of a majority stake.
T-Mobile, which accounts for three-fifths of group revenue, has been gaining subscribers following its merger with Sprint and as it rolls out its 5G service.
In the latest quarter, T-Mobile added 1.7 million customers who pay their bills monthly, increasing its customer base to 110 million.
Deutsche Telekom reported 54.6 million mobile customers in Germany and 46.5 million in the rest of Europe.
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(Reporting by Supantha Mukherjee in Stockholm; Editing by Sherry Jacob-Phillips)