ECON - Deutsche Telekom reports strong growth

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BBC Strong growth at Deutsche Telekom Shareholders are in revolt at Deutsche Telekom

German telephone giant Deutsche Telekom announced a rise in profits and revenues for the first half of the year, but was unable to dispel all the gloom it has created in recent months.

The firm said it had a 16.9% rise in revenues and a 12% rise in core profits for the first half of 2001.

It forecast double-digit average growth in both profits and sales until at least 2004.

Telekom's financial results are being keenly watched by the German government - as well as investors - for news on the phone operator plans to halt the slide in its share price and cut its debts.

Selling up

Deutsche Telekom said revenues rose 16.9% to 22.5bn euro (£14.2bn; $20.5bn) in the first half of 2001.

Profits before interest, tax, depreciation and amortisation (EBITDA) rose 12%, excluding one-offs, to 7.2bn euros.

But on a net basis, the company made a net loss of 349m euros.

The figures were almost exactly in line with market expectations.

The company also helped cheer investors by confirming that it planned to float its T-Mobile cellular unit next year.

The firm hopes to earn 10bn euros from the listing.

Government concerns

The German government is becoming increasingly concerned about the firm's performance.

The Finance Ministry confirmed it called in Telekom chairman Ron Sommer for talks on Monday ahead of the financial results.

Mr Sommer discussed the share price with finance minister Hans Eichel, a ministry spokeswoman said.

Deutsche Telekom's shares are widely held by small investors and have slipped 82% in recent weeks.

"We really wanted to know what the Telekom chairman intends to do for his major shareholders and many minor shareholders", a government source said.

Shares down

The telecom firm's share price has slumped in recent weeks as other companies have offloaded Telekom shares they acquired as payment when Telekom bought US mobile phone operator Voicestream.

As the shares started to slide, Mr Sommer became embroiled in a public row with another major German company, Deutsche Bank, over its sale of a huge tranche of the phone company's shares for a client, Hutchison Whampoa.

Unveiling its results, the firm said it expected some 170 million more of its shares to "flow back" onto the German market.

Deutsche Telekom said its meeting with Mr Eichel was "routine".

-- Anonymous, August 28, 2001


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