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Deutsche Telekom upbeat after meeting 2008 targets

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Deutsche Telekom upbeat after meeting 2008 targets
Photo: DPA
09:00 CET+01:00
Europe's biggest telecoms operator, Deutsche Telekom, said Friday it had achieved its 2008 targets and voiced confidence about this year's results as well.

Deutsche Telekom posted a 2008 net profit of €1.48 billion ($1.88 billion), nearly three times the 2007 level of €571 million.

In the fourth quarter of last year, however, the telecoms operator suffered a loss of €730 million resulting from its purchase of the Greek group OTE, a statement said.

That was however less than the comparable loss in the last three months of 2007, of €750 million.

Adjusted core earnings edged higher last year to €19.46 billion although sales slipped slightly to €61.67 billion.

The company plans to pay a dividend of €0.78 per share, unchanged from the previous year.

"Our 2008 financial year is characterized by a stable performance and sound financial figures," chairman Rene Obermann said in the statement.

He thanked finance director Karl-Gerhard Eick, who will step down in a few days.

"It is very much down to Karl-Gerhard Eick's work over the past nine years that the company has done so well through some difficult times," Obermann said.

Deutsche Telekom said core earnings this year should be on the same order as in 2008, excluding the cost of consolidating a 25 percent stake in OTE into its operations.

The company said it had managed to stem losses in its fixed line operations, which continue to shed clients, particularly in Germany.

Core earnings for the division fell by 4.9 percent in the group's home market but that was better than the forecast drop of five to eight percent.

Mobile phone activities picked up strongly in central and eastern Europe meanwhile while the results from Britain and the United States suffered from unfavourable exchange rates.

Deutsche Telekom said it planned to reorganise its operations and would pull German mobile and fixed line activities together into a single group that will account for roughly one half of total sales.

Technical activities and product development would also come under one roof, and the group would consolidate global purchasing as well.

Deutsche Telekom said those changes should not lead to job losses but would mean a reorganisation of its management.

Timotheaus Hoettges, 46, is to replace Eick, who stepped down to become head of the German retail and tourism group Arcandor.

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