KPN 3rd-Quarter Profits Up by 12%

­Netherlands based KPN has reported a 12% rise in its 3rd-quarter profits to EUR395 million, up from EUR353 million a year earlier, although revenues fell 8.8% to EUR3.33 billion.

In Q3 2009, the economic downturn had no material impact on Mobile International. Revenues and other income were slightly below last year with a 0.8% y-on-y decline. The 2.4% y-on-y service revenue growth was the result of positive performance in Belgium and Rest of World, combined with almost flat (-0.4% y-on-y) service revenue growth in Germany.

KPN's Chief Executive Ad Scheepbouwer commented, "KPN's third quarter results show that our focus on EBITDA, free cash flow and market shares is paying off. With a resilient performance in our Dutch Telco business, solid profitability at Mobile International and an unchanged economic impact on our businesses compared to the first half of 2009, our focus has enabled KPN to maintain market shares and grow EBITDA for the third consecutive quarter, up 4.4% year-on-year. KPN is on track strategically, is soundly financed and we are confident of achieving our 2009 and 2010 objectives. Therefore, we can confirm the outlook for revenues, EBITDA, and free cash flow for 2009 and 2010,"

Both in Germany and in Belgium, KPN believes it has outperformed the market in Q3 2009. In Belgium, the ongoing implementation of the Challenger strategy is paying off, leading to wireless service revenue growth of 7.7% y-on-y. Similar initiatives are in progress to re-ignite service revenue growth in Germany. EBITDA of Mobile International was up 4.9% y-on-y in Q3, which is in line with Q2. Continued solid underlying profitability is evidenced in the 39% EBITDA margin.

Revenues and other income in Germany were down 2.5% y-on-y in Q3 2009. E-Plus service revenue growth was almost flat, including a negative MTA and roaming impact of approximately 4%. EBITDA showed a continued growth of 3.3% y-on-y in Q3 2009, resulting in an EBITDA margin of 42.4%.

During Q3 2009, E-Plus has taken initiatives to further implement and execute the Challenger strategy. These initiatives focus on expanding the addressable market by moving into geographical regions and market segments that are currently underrepresented. Through meticulous execution this will allow E-Plus to return to increased service revenue growth.

In Belgium revenues and other income grew 4.7% y-on-y, driven by BASE's strong increase in service revenues of 7.7% y-on-y, including a negative roaming impact of approximately 3%. As a result of the solid service revenue growth in Q3 2009, BASE's estimated market share increased further to over 17%. This marks the sixth consecutive quarter of y-on-y service revenue growth.

Revenue growth in Rest of World was driven by continued growth from KPN's MVNO operations in Spain and France, based on their value-for-money propositions through own brands and wholesale partners. Ortel's performance is gradually improving, although competitive pressure remains within the cultural segment.

Posted to the site on 27th October 2009