BÜDELSDORF (dpa-AFX) - Telecommunications provider Freenet sees a little more room for improvement for its annual profit target after the third quarter. The increase in earnings before interest, taxes, depreciation and amortization (EBITDA) to 500 million euros in the current financial year and to at least 520 million euros in 2025 is very realistic, wrote Group CEO Christoph Vilanek in a letter to shareholders.

However, Freenet shares fell in trading on Thursday morning. They recently traded around 2.3 percent lower. The shares had recently had a good run and the presentation of the figures was not unusual, noted one trader. Profit-taking could not be ruled out.

As the MDax-listed company announced on Wednesday evening after the Xetra close in Büdelsdorf, the operating result for 2023 is expected to rise from 478.7 million euros in the previous year to between 495 and 505 million euros. Previously, the Executive Board had communicated a target of EUR 480 to 500 million.

The Management Board also became slightly more optimistic in its forecast for free cash flow: the figure is expected to reach 260 to 270 million euros - compared to 249.2 million euros in the previous year. Previously, the lower end of the range was ten million euros less.

In the third quarter, Freenet largely performed in line with analysts' expectations. Sales climbed by 2.6 percent to almost 669 million euros. The majority of this is attributable to the sale of mobile phone contracts - the segment accounts for almost nine tenths of total revenue over the first nine months, but only increased slightly compared to the previous year.

Freenet increased sales of its television products much more strongly. Customers can now watch channels that were previously available in poorer quality via cable television in higher resolution. With the abolition of the so-called ancillary cost privilege, the Management Board senses an opportunity for a large number of new customers, as fees for a cable TV connection may then no longer be billed as a lump sum via the ancillary rental costs. From mid-2024, around 12 million households in Germany will have to decide how they want to watch television.

Despite a slump in consumption and tighter budgets, customers appear to be willing to pay extra for a better picture. Since the turn of the year, the number of TV subscription customers has climbed by more than a tenth. In the current half-year, Freenet also intends to invest around 10 million euros to make "Waipu.tv" better known.

At Group level, however, the operating result stagnated in the past quarter at around 121.5 million euros - industry experts had hoped for a little more here. The bottom line for Freenet shareholders was a profit of 62.9 million euros after 23.4 million euros in the previous year. The reason for this is significantly higher depreciation and amortization in the same period last year./ngu/mis/jha/