KPN claims E-Plus sale will pay dividends

KPN claims E-Plus sale will pay dividends

30 JUL 2014

Netherlands-based operator group KPN said it sees its financial performance stabilising toward the end of 2014, with the sale of E-Plus in Germany giving it a “solid financial profile”.

In a statement, Eelco Blok (pictured), the company’s CEO, said the sale of the German unit will provide “a strong platform to execute our strategy in Netherlands and Belgium”.

“We will also own an attractive 20.5 per cent stake in Telefonica Deutschland and will benefit from substantial synergies,” he continued. The company flagged that this could lead to additional cash from dividends.

The EU gave the green-light to the sale of E-Plus to Telefonica earlier this month, subject to a number of conditions intended to preserve competition in Germany.

KPN also said it will recommence dividend payments this year, “which we intend to grow in 2015”.

On a group level, the company reported a profit of €349 million, up 115.4 per cent year-on-year, on revenue of €2 billion, down 7.1 per cent.

However, the bottom line was flattered by a €361 million benefit related to its pension provisions.

The company said it saw “continued operational progress” in its home market, where it has 1.4 million 4G customers across its business and consumer segments.

But a shift toward SIM-only, lower above-bundle usage, and lower pricing levels compared to last year lead to a 9 per cent year-on-year decrease in consumer mobile revenue, at €354 million.

Consumer mobile EBITDA fell by 63 per cent to €50 million.

KPN also noted weakness in its domestic business segment, as a result of “ongoing customer rationalisation and optimisation”.

For its ‘Mobile International’ group, revenue increased by 0.1 per cent to €998 million, with the strength of E-Plus offset by weakness at BASE in Belgium. EBITDA for this group decreased by 6.8 per cent to €300 million.

Revenue in Germany – now categorised as a discontinued operation – increased by 1.1 per cent to €812 million. EBITDA decreased by 3.6 per cent to €265 million.

Underlying service revenue increased by 5.3 per cent, driven by strong contract subscriber growth.

For its Belgian operation (BASE), revenue decreased by 2.7 per cent to €178 million. Underlying mobile service revenue decreased due to “continued customer optimisation in a competitive mobile market”.

EBITDA in this unit fell by 27 per cent to €36 million.

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