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Deutsche Telekom upbeat after meeting 2008 targets

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 upbeat after meeting 2008 targets
Photo: DPA

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.

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.