Telefonica Deutschland third quarter core profit drops
Telefonica Deutschland reported a 15-percent drop in quarterly core earnings as it increased spending on marketing to lure subscribers. The company, controlled by Spain's Telefonica, reported on November 10 a decline in fiscal third-quarter operating income before depreciation and amortisation (OIBDA) excluding special items to 248 million euros ($309.40 million). That was below analysts' mean forecast for 251 million in a Reuters poll.
Copyright Reuters, 2014
Revenues dropped 0.5 percent to 1.22 billion euros.
Telefonica Deutschland bought the German business of Dutch peer KPN, which operates under the E-Plus brand, for 8.6 billion euros to create Germany's largest telecoms operator in terms of customers.
Including E-Plus, Telefonica Deutschland expects fourth-quarter OIBDA, excluding special items to be slightly lower than 350 million euros on revenues of around 2 billion euros.
The Telefonica Deutschland/E-Plus combination has a market share of roughly 30 percent and Telefonica is hoping to gain more clout in its battle for mobile subscribers with Vodafone and Deutsche Telekom.
Telefonica Deutschland said last month it would cut 18 percent of full-time jobs to help achieve cost savings from its take-over of rival E-Plus.
The company plans to scrap 1,600 jobs out of a total of 9,100 by 2018. The planned measures will contribute to achieving synergies of more than 5 billion euros.