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EARNINGS

Deutsche Telekom stands by 2008 outlook

Deutsche Telekom, the leading European telecommunications operator, posted third-quarter results on Thursday which were in line with expectations and stood by its outlook for the full year.

Deutsche Telekom stands by 2008 outlook
Photo: DPA

“The worsening financial market crisis has not yet had an impact on the development of operations,” a company statement said, in sharp contrast to many German groups that have warned of falling profits owing to weakening global economic activity.

From July to September, the former telecoms monopoly continued the trend seen in recent quarters, a fall in subscriber sales but a stabilisation of operating profit.

Pre-tax operating profit, which the group uses as its benchmark, edged 2.4 percent higher to €5.25 billion ($6.6 billion). For all of 2008, Deutsche Telekom expects the figure to reach €19.3 billion. The group forecast that in 2009, pre-tax operating profit would remain stable or increase slightly.

“The past has shown that telecommunications are more resistant to the

economy than other sectors,” Deutsche Telekom boss Rene Obermann told a press

conference.

Net profit, which is often subjected to exceptional items, more than tripled to €895 million, while sales slipped by 1.5 percent to €15.45 billion.

Mobile telephone activities appeared to be resisting the global economic slowdown for now, and the group’s T-mobile unit is present in Germany, Britain, the United States and several eastern European countries. It reported having gained 1.2 million new clients in the third quarter.

But fixed line service pursued its plunge owing to competition and client’s switch to mobile service, losing 574,000 customers in the three-month period. T-Systems, the group’s information services division, also saw sales drop by almost seven percent. On Thursday, Deutsche Telekom said the unit would be reorganized and would focus in the future on major clients.

EARNINGS

Despite emissions scandal, Volkswagen clinches record sales

German carmaker Volkswagen said Wednesday it sold a record number of vehicles in 2017, putting it on track to hold on to the title of world's largest carmaker two years after its "dieselgate" emissions scandal.

Despite emissions scandal, Volkswagen clinches record sales
Photo: DPA

Some 10.74 million vehicles from VW or its subsidiaries ranging from Porsche and Audi to Skoda and Seat rolled out of dealerships last year – an increase of 4.3 percent over the previous year, the carmaker said.

“We are grateful to our customers for the trust these figures reflect,” chief executive Matthias Müller said in a statement.

VW's sales look likely to outstrip Japanese rival Toyota's, whose annual figure for last year is expected to stand at around 10.35 million units.

Nevertheless, the Wolfsburg-based group is still facing a growing challenge from the Renault-Nissan-Mitsubishi alliance, which is targeting 10.5 million combined shipments in 2017.

VW's strong performance underlines its recovery from the blow it was dealt two years ago, when it admitted in September 2015 to cheating regulators' emissions tests on millions of diesel cars worldwide.

It has since begun to rebuild its reputation in some of the world's most important markets, with Chinese sales adding 5.1 percent to 4.2 million vehicles last year and US sales rising 5.8 percent to 625,000 vehicles.

Growth was more spectacular in South America, at 23.7 percent, but sales only reached 522,000 units in absolute terms.

Meanwhile, sales in Central and Eastern Europe including Russia rose by 13.2 percent to 745,000 vehicles.

But growth in Western Europe was more sluggish, with shipments up 1.4 percent at 3.6 million units.

Looking to the group's different brands, generalist VW booked an increase of 4.2 percent to 6.2 million units, while Skoda added 6.6 percent to 1.2 million and Seat 14.6 percent to 468,000 units.

Luxury Porsche shipped 246,000 cars, up 3.6 percent on the year, while Audi fell behind high-end rivals BMW and Mercedes-Benz with 0.6-percent growth to 1.9 million sales.

Truckmaking units MAN and Scania both reported 11.6-percent growth.

Looking to the future, Müller said VW was making “decisive investments in the mobility of tomorrow”.

VW announced in November that it would invest more than 34 billion euros ($41 billion) in  future vehicles and technologies – such as electric and hybrid cars, autonomous driving and digitalisation – by 2022.