Telekom’s pledges hold
Deutsche Telekom would keep to its promise of hiking dividends in 2018 and the years thereafter, its chief financial officer, Thomas Dannenfeldt, told German daily Boersen-Zeitung.
“I am very confident that we will be able to stick to our promises, in particular with respect to the planned increase of our free cash flow by about 10% and the according dividend policy,” he was quoted as saying on Saturday.
“I see no reason to deviate from [our planning] in 2018,” he said, adding that investors should expect continuous growth of capital expenditure, sales, earnings and dividends.
Deutsche Telekom has said in the past that it expects a 12% increase in 2017 free cash flow — the money available for dividend payments — with a corresponding dividend hike.
While Germany’s largest telecoms provider is benefiting from a strong US business and a rebound of its European operations it will also get a boost from US tax cuts.
“Our earnings after minorities will rise by a relevant threedigit million-euro amount annually,” Dannenfeldt said.
The company scrapped plans to merge T-Mobile US with Sprint in November, but Deutsche Telekom was “not dogmatic about the subject”, he added. “If someone were to come now and offered, say, $120 a share, all cash, then we would have to think about it,” he said.
T-Mobile’s shares closed at $63.71 on Friday, compared with a record high of $68.40 reached in May.
With respect to its operations in the Netherlands, where Deutsche Telekom acquired a business from Sweden’s Tele2 in December, a stock market flotation of the combined business was possible, Dannenfeldt told the paper.
“But first, we need a nod for our deal from Brussels.… Then we need to integrate the business, and that will take one to 1.5 years.” Separately, on its struggling T-Systems business, Dannenfeldt said that a partial sale of the German IT services and consulting unit could not be ruled out.
Last week, Deutsche Telekom announced plans to split TSystems into two separate units in a bid to halt a slide in earnings.