MONTABAUR / LONDON (IT BOLTWISE) – United Internet has managed to increase profits in the first nine months of the year despite significant investments in expanding its mobile network. Subsidiary Ionos reported revenue growth but plans to sell its AdTech business to focus on core segments. However, the share prices of United Internet and Ionos reacted on the stock market with declines.
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United Internet achieved remarkable profit growth in the first nine months of 2023, despite significant investments in expanding the mobile network of its subsidiary 1&1. These investments are part of a strategic initiative to improve network coverage and quality, which should strengthen the company’s long-term competitiveness. Despite these financial burdens, the company was able to increase its profits, which can be attributed to an increased number of customers.
Subsidiary Ionos, known for its internet services, has also seen revenue growth. However, Ionos plans to divest itself of its AdTech business to focus more on its core segments such as website products and cloud services. This strategic realignment is intended to improve the company’s efficiency and focus by focusing on more profitable and higher-growth areas.
However, these developments were viewed with skepticism on the stock market. United Internet shares fell by around 2.8 percent, while Ionos fell by around 6.7 percent after an initial upward trend. These price movements reflect the uncertainties associated with strategic decisions and market conditions.
Analysts such as JPMorgan’s Toby Ogg have praised Ionos’ performance despite its challenges in the third quarter, particularly the increase in adjusted operating income (Ebitda). Still, sales growth showed signs of slowing, reflecting challenging market conditions. The revised forecast for adjusted operating profit no longer takes into account the AdTech for sale as this business is considered volatile.
Overall, United Internet recorded sales growth of 1.4 percent to around 4.5 billion euros in the first nine months. Adjusted operating profit rose by almost two percent to around 966 million euros. At Ionos, sales without AdTech rose by 6.2 percent to around 980 million euros, which is due to a higher number of customers. These developments show that United Internet remains on a solid growth path despite the challenges.
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