KPN 2Q Net Profit More Than Doubles

Royal KPN NV. Wednesday said net profit for the second quarter more than doubled, boosted by a EUR451 million ($605.58 million) release of a provision related to the pension plan agreement in the Netherlands, and said it expects its performance to stabilize toward the rest of the year.

The Dutch landline and mobile telecommunications company based in The Hague made a net profit of EUR349 million for the quarter ended June 30, compared with EUR162 million a year earlier, on revenue of EUR2.0 billion and EUR2.16 billion respectively. Stripping out the provision, it made a net loss of EUR12 million.

The fall in revenue was due to competitive mobile markets, and a continuing fall of the business market size, KPN said.

"Driven by the good strategic progress, including high customer additions in mobile and IPTV, and the execution of the Simplification program, we are witnessing a quarter-on-quarter financial improvement and remain on track for stabilizing financial performance toward the end of this year," Chief Executive Officer Eelco Blok said.

He reiterated that the group plans to restart paying dividends this year after the sale of E-Plus. KPN is in the final stages of merging its German E-Plus business with that of Spain's Telefonica SA to ease its debt burden and enable it to resume paying a dividend. The deal, which received approval from European Union antitrust authorities earlier this month, comes as Europe's fragmented telecoms sector is undergoing a wave of consolidation.

In April KPN said it would pay a dividend for 2014 of EUR0.07, subject the E-Plus sale completing. The dividend payout structure will consist of 1/3 interim dividend planned in August 2014 and the rest in April 2015.

Last week KPN appointed Jan Kees de Jager as chief financial officer from Nov. 1, replacing Steven van Schilfgaarde, who has been interim CFO since September 2013.

Write to Ian Walker at [e-mail]

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