(Reuters) - Deutsche Telekom (DE:DTEGn) said on Thursday that the coronavirus pandemic would have a limited impact on its financial performance as it confirmed its forecasts for revenue and profits this year.
Europe's largest telecoms company reported a 10.2% increase in first-quarter core profits to 6.54 billion euros ($7.07 billion), beating expectations in its own survey of analysts for 6.3 billion euros.
"Deutsche Telekom is an anchor of stability in a global crisis," CEO Tim Hoettges said in a statement. "Our networks are working reliably as digital lifelines for society."
Deutsche Telekom reiterated its forecast for adjusted annual earnings before interest, taxation, depreciation and amortization after leases (EBITDA AL) - management's preferred measure of profitability - of 25.5 billion euros this year.
This does not yet include Sprint, whose $23 billion takeover by U.S. unit T-Mobile (O:TMUS) was completed on April 1. Deutsche Telekom will issue fresh guidance, including Sprint, with its second-quarter results.
Profit growth in the first quarter outstripped a 2.3% increase in revenue as margins were lifted by higher call volumes and lower customer churn, offsetting the impact of store closures, lower roaming revenues and delays to IT projects.
On an organic basis, stripping out the impact of one-off factors such as acquisitions, EBITDA AL rose by 9% in the first quarter.
Free cash flow after leases dipped by 17% as Deutsche Telekom terminated some factoring agreements, a spokesman said, but it stands by its forecast for this metric to reach 8 billion euros this year.
($1 = 0.9255 euros)