BÜDELSDORF (dpa-AFX) - The mobile phone and TV provider Freenet earned less at the beginning of the year due to higher advertising expenditure for its TV product in current business. The mobile provider without its own network is hoping to cash in on consumers' freedom of choice in television due to the upcoming abolition of the so-called ancillary cost privilege. "Accordingly, TV providers are competing intensively for potential customers," wrote the Management Board in a letter to shareholders. Freenet also expects to gain many new customers by 2025 and sees itself as the "fastest-growing TV provider in Germany".

Investors nevertheless gave the Group the cold shoulder: Freenet shares lost around 2.4 percent of their value on Thursday, continuing the previous downward trend. Since the beginning of the year, the company has thus lost around 8 percent in value.

As the MDax-listed company had already announced in Büdelsdorf on Wednesday evening, earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter fell by three percent to 124.2 million euros. However, analysts had on average expected an even greater decline. Freenet explained the development with investments in waipu.tv and increased personnel costs.

With the abolition of the so-called ancillary cost privilege for cable connections, consumers are now free to decide where they receive their television - and providers such as Freenet and Deutsche Telekom are rubbing their hands together. The transition period runs until June 30. From July 2024, fees for cable TV may no longer be passed on to tenants on a flat-rate basis. Until now, the German subsidiary of British telecommunications provider Vodafone, which offers cable TV, has benefited most from the regulation.

According to analyst Ulrich Rathe from the French commercial bank Societe Generale, the results were in line with expectations overall: "There are a few points of contention - above all the somewhat weak EBITDA in the mobile sector. Apart from that, subscriber growth at waipu.tv exceeded the record additions in the fourth quarter." This development is an important proof of the correctness of the high TV investments, which, among other things, are having a painful impact on the operating profit this year.

The number of Freenet subscribers rose by 137,000 to around 9.63 million, mainly driven by strong growth at waipu.tv. The North German company's turnover stagnated at around 639 million euros. The Group cited the continuing decline in low-margin hardware sales as the reason for this. Freenet itself described 2024 as a "year of transition".

Below the line, the profit attributable to the company's own shareholders climbed from 18 million euros in the previous year to 65 million euros. A year earlier, depreciation and amortization had been a burden, and this time Freenet was also able to offset a tax credit. Group CEO Christoph Vilanek confirmed the forecast for the year. He continues to expect an operating profit excluding interest, taxes, depreciation and amortization of between 495 and 515 million euros./lfi/ngu/men