FRANKFURT, Feb 22 (Reuters) - Telefonica Deutschland raised its target for synergies from its acquisition of E-Plus, after reporting better-than-expected core profit for the fourth quarter.
The company, which bought E-Plus for 8.6 billion euros ($9.1 billion) in 2014, said it expected to reap annual benefits of 900 million euros by 2019, up from a previous forecast for 800 million.
"The company could identify potential additional synergies during the integration, including cost reductions, infrastructure optimization ... as well as synergies from investments in its LTE network," Telefonica Deutschland said in its statement on Wednesday.
The company, controlled by Spain's Telefonica, said fourth-quarter operating income before depreciation and amortisation (OIBDA), excluding special items, rose 5.3 percent to 501 million euros, better then the average expectation of 480 million euros in a Reuters poll.
Fourth-quarter sales dropped 6 percent to 1.94 billion euros. The telecoms operator said it expected core profit to rise by as much as a mid-single digit percentage in 2017.
It proposed a dividend of 0.25 euros per share for 2016 and confirmed its guidance for a further rise of dividend payments in each of the next two years.
Wireless service revenues dropped by 2.1 percent to 1.35 billion euros in the fourth quarter as "intensive competition" in the segment persisted, the company said.
In 2017, Telefonica Deutschland expects its wireless service revenues to decline slightly or come in flat compared with last year.
$1 = 0.9483 euros Reporting by Harro ten Wolde; Editing by Maria Sheahan