KPN Posts Financial Loss - to Raise $5.4 Billion from Shareholders

Published on: 5th Feb 2013

­Netherlands based KPN has posted a net loss for the fourth-quarter of last year, on lower revenues, and announced plans to raise EUR4 billion (US$5.4 billion) from its shareholders.

The company posted a net loss of EUR160 million, compared to a profit of EUR176 million a year earlier. Revenues during the three months to the end of December fell by 3 percent to EUR3.27 billion (US$4.44 billion) due to the sale of Getronics and declining revenues in The Netherlands.

Net debt at the end of Q4 2012 amounted to EUR 12 billion.

KPN's reported net debt / EBITDA has increased gradually over the last 12 months from 2.3x as of Q4 2011 to 3.0x as of Q4 2012, when including the payment of EUR 1,352m for the Dutch spectrum auction (paid in January 2013).

As a result of rising debt, the company has announced a EUR4 billion rights issue to strengthen its balance sheet. The rights issue would lower KPN's reported net debt / EBITDA at the end of 2012 by approximately 0.9x. KPN targets net debt / EBITDA between 2.0 - 2.5x at the end of 2013.

CEO, Eelco Blok commented: "In 2012, KPN continued to face a challenging environment. The adverse macro-economic conditions continued to weigh on consumer confidence and on the investment plans of our business customers. Moreover, competition intensified in our mobile markets. The financial performance of our businesses in 2012 was largely within the outlook ranges, though supported by asset disposals and somewhat below our expectations at the start of the year."

The company previously announced that it would also scrap its shareholder dividend to preserve cash.

Mexico's America Movil recently built up a stake of 28% in the company, against the wishes of the KPN board. If the Mexican company does not participate in the rights issue it would see its stake diluted as a result.

 

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