KPN reports strong profits for Q1

12 May 2003

The Netherlands’ leading fixed line and mobile carrier KPN [NYSE: KPN] posted a net profit of EUR770 million in the three months to 31 March 2003, compared with a loss of EUR384 million in the corresponding period of 2002. The company attributed much of the improvement to higher EBITDA stemming from growth in its Mobile division and a raft of cost-cutting measures at its Fixed line and Other business operations; EBITDA rose by EUR268 million to EUR1.2 billion. Revenues at its core wireline and wireless divisions, excluding exceptional items, increased by 5.6% or EUR162 million, though this was partially offset by lower revenues from Other activities. For the first quarter total group revenues stood at EUR2.996 billion, compared with EUR2.924 billion a year ago.

At the end of the period in review KPN’s fixed line business reported just under 6.26 million main lines in service, a 3.7% drop year-on-year, and 1.55 million ISDN lines – up 6% from 1.46 million. The company said that demand for broadband services continued apace with the number of ADSL connections rising from 175,000 in March 2002 to 418,000 in March 2003. Meanwhile, the Group’s mobile arm witnessed revenue growth of 15.2% through increased traffic and efforts to consolidate its enterprises. In the first quarter of 2003 the total number of mobile subscribers increased from 13.4 million to 13.5 million, of whom 4.9 million were registered in the Netherlands, 7.44 million in Germany and 1.13 million in Belgium. i-mode users numbered 285,000, up from 236,000 at the end of 2002 and 8,000 nine months before that.