News
Dutch incumbent swings to net profit following sale of Telefonica Deutschland shares, lower gross debt.
KPN on Wednesday reported a 9.7% decline in adjusted fourth quarter revenue, as a tax settlement in the year-ago quarter and a weak business market offset growth at its consumer division.
The Dutch incumbent generated revenues of €1.75 billion in the three months to 31 December, down from €1.93 billion a year ago.
Revenue at the consumer arm grew 2.3% year-on-year to €491 million, as growth in KPN’s broadband, IPTV and mobile subscribers offset ongoing declines in traditional telephony customers.
However, KPN’s enterprise division saw revenue fall to €672 million from €752 million a year earlier.
"We achieved strong customer base growth in Consumer in 2015 as a result of our focus on delivering an excellent customer experience, supported by our best-in-class networks and innovative services," said KPN chief executive Eelco Blok, in a statement.
"We continue to operate in a challenging business market where customer needs are changing from traditional to new services. We are rationalising and standardising the business organisation to deliver an improvement in customer satisfaction, capture growth in new services and support profitability going forward," he said.
The mixed performance, coupled with a €44 million tax settlement in the year-ago quarter, resulted in KPN’s fourth quarter EBITDA falling 12% year-on-year to €578 million.
However, the telco swung to a net profit of €254 million from a year earlier loss of €16 million thanks to lower gross debt and proceeds from the sale of Telefonica Deutschland shares.
KPN acquired a 20.5% stake in Telefonica Deutschland as part of the sale of its German mobile unit E-Plus, which was completed in October 2014. In November, KPN offloaded 150 million shares to institutional investors at a price of €5.37 per share. The transaction reduced its Telefonica Deutschland stake to 15.5%.
KPN’s full-year revenue fell to €7.01 billion from €7.41 billion in 2014. Adjusted EBITDA was flat at €2.42 billion, while net profit came in at €698 million compared to a loss of €151 million in 2014.
For 2016, KPN expects flat adjusted EBITDA and capex of around €1.2 billion.
Blok said KPN’s priorities for this year are "growing the number of services and revenues per household in consumer, the ongoing transformation of the business segment and [the] execution of our Simplification program," which is jargon for thinning out middle-management and making senior management more directly accountable.
