Deutsche Telekom and DHL Bonn DAX companies off to solid start

Bonn · Two DAX companies, two confident CEOs, and two solid first quarter results. Deutsche Telekom and Deutsche Post DHL published their results for the first quarter of 2017 on Wednesday.

Deutsche Telekom was particularly pleased about how well business was going for their U.S. subsidiary T-Mobile. CEO Tim Höttges opened the teleconference yesterday with praise for the branch in the U.S. He also noted the positive result in the first quarter with 1.1 million new customers. Höttges reported that the money that had been invested in the U.S. business - a total of 40 billion euros - had paid off. T-Mobile is now strong and financially solid enough to continue its growth.

“We were able to continue to improve and we increased our customer base both domestically and abroad,” said Höttges. In comparison with the first quarter last year, there was strong growth with revenue up 5.8 percent, up to 18.6 billion euros. The EBITDA (earnings before interest, taxes, depreciation and amortization) climbed to 7.5 percent or 5.6 billion euros.

After delivering the positive results, Telekom leadership faced renewed speculation about possible mergers or takeovers in the U.S. While not ruling out that there might be talks within the branch about such strategies, Höttges refused to speculate.

Deutsche Post DHL continues to see the Parcel business doing very well, but there are issues in the freight division. Market freight rates increased significantly in the first quarter and it wasn’t possible to pass on the higher rates to the customers. The division's gross profit margin declined, while operating profit decreased from 51 million euros to 40 million euros.

At the same time, CEO Frank Appel draws a confident interim conclusion on the way to meeting strategic and financial goals for 2020. Deutsche Post DHL Group continues to forecast that operating profit will increase by an average of more than 8% annually during the period from 2013 to 2020. Some important milestones have already been achieved in this regard.

Revenue in the parcel division increased by 6.4% to 4.5 billion euros in the first quarter. The UK Mail business, which had been acquired in December, posted a strong increase in revenue, contributing to the positive results. Taking into account all four divisions, group revenue grew significantly by 7.3% to 14.9 billion euros in the first three months of the year. “We are confident in reaching the goals set for 2017,” said Appel.

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