KPN’s Q4 net profit slumps on taxes, but operating profit rises

27 Jan 2011

The Netherlands’ former monopoly operator KPN Telecom (KPN, or Royal KPN as it is also known) reported a sharp 57% drop in fourth-quarter earnings in 2010, as last year’s figures included a one-time tax windfall, but said revenues were stable compared with FY2009. KPN booked net income of EUR474 million (USD649 million) in the three months ended 31 December 2010, compared to EUR1.1 billion in the corresponding period a year ago, which included a EUR705 million increase in deferred tax assets, it said. 4Q10 sales reached EUR3.390 billion though, up marginally by 0.5% from EUR3.371 million previously. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the latest quarter rose 4% year-on-year to EUR1.36 billion. Revenue at the group’s domestic Dutch telecoms division fell 2.4% y-o-y to EUR1.74 billion, attributed to fixed-mobile substitution, a regulator-imposed price cut and a ‘challenging environment’ in the corporate market.

On a more positive note, sales in Germany, where E-Plus is the third largest mobile operator, climbed 3.7% y-o-y to EUR820 million. E-Plus booked EBITDA of EUR322 million, down 2.7%, but added that it spent EUR284 million in May 2010 to add transmission frequencies in the German regulator’s auction. ‘Germany is doing very well, and we expect this to continue in 2011,’ along with growth in Belgium, CFO Carla Smits-Nusteling said at the press conference. ‘In the Netherlands, we also expect a further breakthrough in sales of mobile data and interactive television for this year.’ The group’s full-year net income fell 18% year-on-year to EUR1.79 billion on a 0.8% fall in sales to EUR13.4 billion, KPN said. EBITDA increased 5.5% to EUR5.48 billion. KPN also announced its intentions to increase its dividend in 2011 and to conduct a second stock buyback in as many years. The telco intends to repurchase EUR1 billion in shares this year, matching the buyback of 2010.

Netherlands, KPN