According to preliminary results, Deutsche Telekom-owned ISP T-Online will report first-half losses narrower than analysts’ expectations, though the second quarter saw its first ever fall in sales.

The company will post a Q2 loss of E123.3 million, with sales of E259m (down 7.5% on the first quarter). Over the first six months of the year, sales rose 53% above the equivalent period in 2000.

T-Online will also post a E56.9m operating loss excluding interest and tax, again beating analysts’ expectations. Underpinning the healthy operating performance, said the group, was its cost-cutting initiative and a fall in flat-rate customers. T-Online is currently switching its flat-rate subscribers to new tariffs to raise its margins.

The ISP’s portal operations performed particularly well, with a 17% rise in advertising (50% of which comes from parent Deutsche Telekom) and e-commerce revenue to E36.6m. However, revenue from access fees (which make up 85% of total sales) fell 10%, which the company blamed on the flat rate and seasonal factors.

News source: Handelsblatt (Germany)