Recovering Deutsche Telekom to restore dividend payments in 2004

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The debt-laden German telecoms firm Deutsche Telekom yesterday signalled it would restart dividend payments in 2004 after turning out another solid quarterly performance boosted by its mobile phone and internet businesses.

Kai-Uwe Ricke, the company's chief executive, said: "Our programs for improving efficiency are generating better results. We are growing... And this is against the background of a weak economy in the first six months of the year."

Deutsche Telekom, which has been cutting costs and selling assets to get its debt down, said the main drivers of growth in the period had been its internet and mobile phone divisions, called T-Online and T-Mobile respectively. In the first six months of the year, Deutsche Telekom reported an underlying, or Ebitda, profit of €9.1bn (£6.3bn) - an increase of 17 per cent on the year before. Sales were up 5.7 per cent at €27.2bn. "We have further increased revenue and Ebitda and have made rapid progress in reducing debt," Mr Ricke said.

Its mobile phone division T-Mobile, formerly One2One, grew sales by 19 per cent to €10.9bn in the first half thanks to a 2.6 million rise in customer numbers and improved average customer spending. At the internet arm, T-Online, sales grew 21 per cent to €894m - boosted by higher numbers of broadband customers.

There was also good news on the company's debt. The figure stood at €53bn at the end of June - a fall of €8.1bn from the end of December and €11.3bn below the €64.3bn debt pile the company had at the end of last September.

The progress left Deutsche Telekom feeling confident enough to say it planned to pay a dividend for 2004 - underscoring management's confidence in the company's performance. But the company cautioned that "a recovery of the national economy" was not yet on the horizon.