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Corporate Reports

Deutsche Telekom deeply in the red on writedowns

Deutsche Telekom of Germany has reported massive losses, putting them down primarily to merger-related writedowns in the US. But the company said revenues had been stable, allowing for an unchanged dividend.

German telecommunications giant Deutsche Telekom announced Thursday it logged a bottom-line loss of 5.25 billion euros ($6.9 billion) for 2012.

"We recorded the net loss primarily due to the recognition of an impairment loss of 7.4 billion euros on T-Mobile USA," Chief Executive Rene Obermann said in a statement.

He explained it was a non-cash, purely accounting effect as a consequence of the planned business cooperation between T-Mobile USA and its competitor MetroPCS, taking into consideration that Deutsche Telekom's US subsidiary was worth more years ago than at the time the merger was announced last October.

No need to worry?

"This loss of billions is not what it appears to be," Obermann commented. "We're not lacking in funds to drive forward the development of the group."

He also stated the net loss didn't come as a surprise, meaning that Deutsche Telekom achieved its targets for 2012 with stable revenues, enabling the company to pay an unchanged dividend of 0.70 euros per share for 2012.

Nonetheless, last year's earnings results marked Deutsche Telekom's first foray into negative territory in 10 years. Back in 2002, the firm of 230,000 employees worldwide booked annual net losses of over 24 billion euros.

hg/kms (Reuters, AFP)