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D. Tel shows Europe's biggest loss
FRANKFURT, Germany (CNN) -- Deutsche Telekom, Europe's biggest phone company, posted the biggest annual loss in the continent's history on Monday. The German company racked up a 2002 net loss of 24.6 billion euros ($27.2 billion) but its fourth-quarter loss narrowed to 100 million euros, down from 2.5 billion euros in the same period of a year ago. Chief Executive Kai-Uwe Ricke has been forced to write down the value of assets bought at the height of the telecom boom by former CEO Ron Sommer by 19.3 billion euros. Sommer was ousted as the telecom operator's debt ballooned. "We are well aware of the scale of this (net) figure,'' said Ricke. "The results reflect the grave situation that the company found itself in last year. We are in no way trying to gloss over this.'' But Ricke has promised to cut the company's debt to 50 billion euros this year by selling assets and cutting investment. The company's debt fell to 61.1 billion euros at the end of last year, down from 64 billion euros at the end of September. "We expect DT to have lowered net debt to 62.1 billion euros at year end from 64 billion at Q3 (third quarter) 2002," analysts at Merrill Lynch wrote in a note to investors before Monday's announcement. "This is largely attributable to 2.4 billion of disposals in Q4, including the sale of property (1.1 billion euros), T-Online shares (730 million euros) and other assets." "We remain cautious due to concerns over the debt reduction plan, execution risk at T-Mobile USA, and a lack of transparency in reporting structure." The company's stock fell 5.4 percent to 9.56 euros in midday Frankfurt trading on Monday. The company's full-year loss had been widely predicted as many of its rivals across the continent have also delivered multi-billion dollar losses. France Telecom made a loss of 20.7 billion euros earlier this month. (Full story) Telekom's loss is bigger than then the 23.3 billion euros loss delivered by Europe's biggest media company Vivendi Universal but a drop in the ocean compared to the $100 billion loss reported by AOL Time Warner, the parent of CNN. Deutsche Telekom's fourth quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 14.6 percent to 4.4 billion euros, beating forecasts of 4.24 billion euros in a Reuters poll of 23 analysts. Its mobile division T-Mobile International drove EBITDA growth, posting a 24.4 percent rise to 1.2 billion euros in quarterly core earnings. T-Com, its fixed-line business, boosted fourth quarter EBITDA to 2.6 billion euros.
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