KPN reports Q3 earnings in line with expectations, revenue up 1%

Business

KPN NV (KPN.AS), the largest Dutch telecommunications company, reported on Tuesday third-quarter core earnings in line with expectations and repeated its full-year financial forecasts.

Adjusted earnings before interest, taxes, depreciation, amortization and leases (EBITDAL) came in at 607 million euros ($706 million) for the three months ended Sept. 30, compared with 598 million euros a year earlier and expectations of 606 million euros in a company-compiled poll.

“We see a healthy customer inflow in consumer and business (operations), especially in mobile,” Chief Executive Officer Joost Farwerck said in a statement.

Revenue increased by 1% to 1.31 billion euros as growth in mobile customers and broadband connections offset a multi-year decline in sales to business customers, which slowed to 2.3%.

KPN, which is targeting a full-year 2021 EBITDAL growth of 1% to 2.345 billion euros, had said in July it would repurchase 200 million euros of shares this year.

With fund assistance from civil servants’ pension fund ABP, KPN is spending more than a billion euros annually to roll out fibre optics to 80% of Dutch households by the end of 2024, its biggest infrastructure investment programme in two decades.

KPN saw its shares slump in May when Farwerck said the company had rejected two takeover approaches because it did not believe private equity suitors EQT (EQTAB.ST) or KKR (KKR.N) would offer any improvement on its own strategy.

KPN, which competes with VodafoneZiggo and T-Mobile Netherlands, saw its shares recover in September when private equity investors Apax Partners and Warburg Pincus — rather than a strategic international competitor — agreed to buy the T-Mobile Dutch operations for 5.1 billion euros.

Shares of KPN are up 9.1% year-to-date, and closed on Monday at 2.71 euros.