KPN Q1 sales drop 2.9%; operating profit rises 8.8%

30 Apr 2021

Dutch fixed and mobile operator KPN reported a 2.9% year-on-year fall in revenue to EUR1.290 billion (USD1.564 billion) in the first quarter of 2021, with EBITDA after Leases (EBITDAaL) dropping 1.3% to EUR568 million, although the telco noted that EBITDAaL was virtually flat if excluding a EUR8 million one-off correction to consumer fixed service revenues, as the effects of lower revenues and elevated spend to improve customer support were offset by continued disciplined cost control. Operating profit (EBIT) improved by 8.8% y-o-y to EUR235 million as lower adjusted EBITDAaL was offset by lower depreciation and amortisation charges, and lower profit & loss restructuring costs. Quarterly net profit of EUR141 million was 18% higher than a year ago, mainly due to lower depreciation and amortisation, and lower finance costs. CAPEX investment was increased by 15% y-o-y to EUR321 million.

The company heralded ‘encouraging’ base developments in mass-market segments, with growth in fixed-mobile households fuelled by fibre, and growth in mobile and fixed SME and wholesale customers. Service revenue growth in Wholesale and Consumer Fixed-Mobile was offset by lower service revenues from Business and Consumer Legacy. Due to travel restrictions relating to COVID-19, KPN saw lower roaming revenues compared to the same quarter last year. Non-service revenues increased 0.7% y-o-y as improvement in Consumer – which KPN mainly attributed to success of its ‘SuperWIFI’ offering – were partly offset by lower non-service revenues in Business.

KPN activated 47,000 new fibre households in 1Q21 (compared to 21,000 in 4Q20) supported by an improved commercial strategy accompanying its fibre rollout and copper-to-fibre upgrades. The growth in KPN’s fibre base is helping to stabilise its wider broadband base with an overall net subscriber loss of 1,000 in 1Q21 (4Q20: 3,000). As a result of its mobile network modernisation programme, KPN’s 5G coverage reached approximately 72% of the Dutch population by end-March 2021.

Netherlands, KPN