MONTABAUR (dpa-AFX) - The internet company United Internet and its mobile subsidiary 1&1 expect better business in the coming year. Sales and operating profit (EBITDA) are expected to increase in 2024, both companies surprisingly announced on Tuesday evening in Montabaur, Rhineland-Palatinate. CEO Ralph Dommermuth is more optimistic than industry experts with his forecasts. Previously, the web hosting subsidiary Ionos had already held out the prospect of growth. The news was well received on the stock market on Wednesday.

United Internet shares gained almost seven percent in the morning, topping the MDax, the index of medium-sized stocks. The shares of 1&1, which are listed in the SDax, also rose by 6.5 percent. Meanwhile, Ionos shares rose by almost three percent. On Tuesday, they had even left trading with a price increase of six and a half percent after the company had announced its business targets for the coming years in the afternoon.

United Internet had only raised its earnings target for 2023 in November. The Management Board now expects further increases for 2024. Sales are set to grow from the EUR 6.2 billion expected for 2023 to EUR 6.5 billion next year. Earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to increase from EUR 1.29 billion to EUR 1.42 billion. Analysts had previously expected somewhat less for both key figures.

The mobile subsidiary 1&1 continues to expect a decline in operating profit (EBITDA) to 655 million euros in the current year. In the coming year, however, earnings are expected to climb by around 10 percent to around EUR 720 million and thus also exceed the figure of EUR 693 million from 2022. Analysts had recently forecast an average of just 680 million euros for 2024. According to the Management Board's plans, service revenue should reach EUR 3.23 billion in the current year and increase by around four percent in the coming year.

After some difficulties and delays, the mobile phone provider 1&1 launched its first real cell phone network a few days ago. Seven years after the end of E-Plus, Germany now has a fourth mobile network again. However, 1&1 only has very few antenna sites for the time being. Where the provider does not have its own antennas, customers will be connected to the O2 network.

Previously, 1&1 had acted as a so-called virtual network operator - renting and marketing the capacities of real network operators for its mobile business. Now the company is competing with its own frequencies and antennas as a real competitor against Deutsche Telekom, Vodafone and Telefónica Deutschland with its O2 brand. The company plans to spend a total of 5 billion euros on the network by 2030.

Ionos also wants to grow further. Higher prices, new customers and new products related to artificial intelligence should drive sales and profit margins further upwards in 2024 and 2025, as the company announced in Karlsruhe on Tuesday afternoon. United Internet floated its webhosting subsidiary on the stock exchange in February and still holds just under 64% of the shares. Despite the recent price increase, Ionos shares are still trading below their issue price of 18.50 euros.

Since the turn of the year, 1&1 shares have gained more than 45 percent in value - and those of the parent company around 15 percent. In the longer term, however, things look much worse. United Internet shares are currently trading almost 40 percent lower than three years ago. And 1&1 shares have lost around a fifth of their value during this period./stw/he/nas/stk