(Bloomberg) — Deutsche Telekom AG forecast profit for 2025 below analysts’ estimates after price wars sprang up in European markets, dampening growth last year.
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Adjusted earnings before interest, taxes, depreciation and amortization after leases will rise about 4.5% this year to €44.9 billion ($47.1 billion), the company said in a statement on Wednesday. Analysts had anticipated adjusted Ebitdaal of €46.9 billion, according to the average of estimates compiled by Bloomberg.
Deutsche Telekom, Europe’s biggest phone carrier, relies on a majority stake in US operator T-Mobile US Inc. for most of its revenue and profit. While T-Mobile’s financial results last month were upbeat, analysts have forecast growth in Germany and the rest of Europe that may slow this year as the continent grapples with price wars and heavy competition.
Deutsche Telekom shares fell 3.6% to €33.71 at 9:14 a.m. in Frankfurt trading. The shares have gained 53% in the last 12 months.
Germany, Deutsche Telekom’s biggest market outside of the US, reported fourth-quarter adjusted Ebitdaal that rose 2.8% to €2.66 billion. Analysts had anticipated €2.65 billion.
Overall Ebitdaal in the fourth quarter rose to €10.6 billion, the company said in the statement. That compared with the average analyst estimate of €10.8 billion. Ebitdaal is a profitability metric used widely by the industry and is a variation of Ebitda that backs out the impact of leased assets, such as radio towers, on earnings. The metric is meant to give a clearer view of operating costs for companies that rely heavily on leases, which are accounted for differently than owned assets.
Telecom companies have been selling off tower assets in the last few years, offering ownership stakes or portfolios to companies that specialize in operating wireless towers and antennas. Deutsche Telekom agreed to sell a 51% stake in its German and Austrian portfolio business, GD Towers, to private equity investors for €10.7 billion in 2022.
–With assistance from Ville Heiskanen.
(Updates with context throughout)
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