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Deutsche Telekom says 5.25 bn euros in red in 2012

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(Globalpost/GlobalPost)

German telecommunications giant Deutsche Telekom said Thursday that massive writedowns in the United States pushed it into a net loss of 5.255 billion euros ($6.9 billion) in 2012.

Nevertheless, Deutsche Telekom achieved its targets for the year, the group insisted in a statement, with a decline in underlying profits but stable revenues.

Furthermore, the telecoms giant said it was sticking to its target for more or less stable earnings this year.

"We recorded a net loss of around 5.3 billion euros, primarily due to the recognition of an impairment loss" of 7.4 billion euros on T-Mobile USA, which the group has agreed to merge with MetroPCS, said chief executive Rene Obermann.

In 2011, Deutsche Telekom booked a year-end profit of 557 million euros.

"This loss of billions is not what it appears to be: we are not lacking in funds to drive forward the development of the group," Obermann insisted.

"As already explained, this non-cash, purely accounting effect is a consequence of the planned business combination of T-Mobile USA and the competitor MetroPCS. The applicable accounting standards require this impairment loss to be recognized," he explained.

Adjusted for the writedowns, net profit declined by 11.3 percent to 2.529 billion euros, while operating profit was down 3.8 percent at 17.978 billion euros on stable revenues of 58.189 billion euros, the statement said.

In light of this, Deutsche Telekom planned to pay an unchanged dividend of 0.70 euros per share for 2012, it said.

Looking ahead to the current year, the group said it was projecting operating profit of 17.4 billion euros.

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http://www.globalpost.com/dispatch/news/afp/130228/deutsche-telekom-says-525-bn-euros-red-2012