Telfort acquisition boosts KPN 1Q profits by 40%

9 May 2006

The Netherlands’ largest telecom company KPN NV reported a 40% rise in profits for the three months to 31 March 2006, boosted by last year’s acquisition of domestic mobile operator Telfort, and reiterated its 2006 forecast for revenues and operating profit. The telco said net income in the quarter rose from EUR274 million (USD348.9 million) to EUR384 million on revenues of EUR3 billion (up from EUR2.89 billion). Operating profit was EUR1.21 billion, up from EUR1.09 billion and slightly higher than the estimated EUR1.16 billion – EUR1.2 billion. The former monopoly’s performance compared favourably with analysts’ average estimates for the company of sales of EUR3.01 billion and profits of EUR330 million.

KPN’s Chief Executive Officer Ad Scheepbouwer is investing in services such as VoIP to offset declining fixed line sales and plans to shed about 8,000 jobs by the end of 2009 to increase earnings. At the start of this month it launched a new service called Mine, which provides TV over the internet offering 48 channels and a movie library with 300 titles. More significantly, KPN acquired the country’s third largest mobile operator Telfort in 2005 to add wireless subscribers to compensate for lower fixed line sales. The EUR980 million deal was completed in October.

Netherlands, KPN, KPN Mobile (old - see KPN), Telfort