Network expansion costs are a problem for United Internet and 1&1
Frankfurt Network expansion and marketing costs have driven earnings growth by United Internet slowed down in the past year. The operating profit (Ebitda) increased by 0.7 percent to 1.27 billion euros, the Internet provider announced on Wednesday. Due to a weaker financial result, the net result even dropped to two from 2.11 euros per share.
Sales, on the other hand, increased by 4.8 percent to 5.92 billion euros and the number of customer contracts by 730,000 to 27.46 million. Revenues and the operating result were within the scope of the company’s targets.
The mobile phone subsidiary 1&1 reportedly increased service revenue by 1.7 percent to EUR 3.18 billion and adjusted operating profit by 3.2 percent to EUR 693.3 million. Here, too, the costs of grid expansion had a dampening effect. The number of contracts increased by 350,000 to 15.78 million.
On this basis United Internet and 1&1 are forecasting unchanged dividends of EUR 0.50 and EUR 0.05 per share respectively. For 2023, United Internet is targeting sales of EUR 6.2 billion and an operating profit at the level of 2022. 1&1 predicted a decline to around 655 million euros for the latter. Service revenues, on the other hand, are expected to rise to EUR 3.23 billion.
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