KPN Profit Down 50% After Tax Gains A Year Earlier

Dutch telecoms firm, KPN has seen its full year profit halved to €1.34 billion (US$1.77 billion) due to a boost from a tax gain a year earlier - although turnover rose by 16 percent to €14.6 billion (US$19.3 billion).

In the fourth quarter of last year, KPN's net profit slumped by 81 percent to €297 million (US$392 million). Its turnover went up by 1.6 percent to €3.72 billion (US$4.91 billion), while the operational profit rose 5.3 percent to €1.28 billion (US$1.69 billion).

Ad Scheepbouwer, CEO KPN commented: "We are pleased with the performance in 2008, meeting guidance on all metrics, but perhaps more importantly bringing the long-standing trend of declining EBITDA in the Netherlands to an end. Looking ahead, it is clear that the economic downturn and regulatory initiatives of the European Commission pose new challenges and bring uncertainty, even though so far we have not seen a material impact. We have already initiated pre-emptive measures and despite the uncertainty about market conditions this year, we can confirm our 2010 outlook, with meaningful progress towards the 2010 EBITDA target in 2009. This is a reflection of the markedly improved competitive position in the Netherlands in recent years and our strong value-for-money positions in Germany and Belgium."

The firm also announced plans to raise €1.5 billion (US$2 billion) via a two-part bond sale - which will be used to refinance existing debts and general business issues.

KPN's net debt amounted to €10.9 billion (US$14.4 billion) whilst the net debt to EBITDA ratio stood at 2.2 by the end of Q4 2008. KPN has a credit rating of BBB+ with a stable outlook by S&P and Baa2 with a stable outlook by Moody's.

Posted to the site on 28th January 2009