KPN lurches into the red as E-Plus impairment charge hits bottom line

22 Oct 2013

Netherlands-based carrier KPN Telecom (or Royal KPN as it is also known) has reported a net loss for the three months ending 30 September 2013, attributed to tax losses and an impairment charge relating to its German mobile business E-Plus, which is being sold to fellow operator Telefonica Deutschland in a deal that will it see receive EUR5.0 billion (USD6.84 billion) in cash and a 20.5% stake in the enlarged mobile operator, lifting the overall value of the deal to EUR8.55 billion. KPN booked a net loss of EUR243 million in the period under review, compared to a EUR267 million net profit in the third quarter of 2012, on revenue of EUR2.08 billion – which excluded the results of E-Plus for the first time. The Dutch telco noted that ‘upon classification as ‘disposal group held for sale’ an impairment of EUR529 million was recorded due to the fair value less costs to sell of the disposal group being lower than its carrying value’. In Q3 2012 KPN reported revenue of EUR2.25 billion. Stripping out the contributions of its E-Plus unit, earnings before interest, tax, depreciation and amortisation (EBITDA) fell 13% to EUR743 million from EUR867 million in Q3 2012. Subject to closing of the E-Plus sale, KPN says it intends to recommence dividend payments again for the year 2014.

The carrier has also announced it is cutting its full-year CAPEX figure, saying it is already ahead of the curve in terms of investment in its high speed fixed lines and mobile broadband networks. It will now spend less than EUR1.7 billion in its infrastructure in fiscal 2013, down from a previous guidance of EUR2.3 billion – which included E-Plus. In a statement the Dutch carrier confirmed: ‘KPN’s investments in fixed and mobile networks in the Netherlands in recent years have been high, especially compared to peers,’ noting that by 1Q14 its 4G mobile network will also be available to the whole of the Netherlands.

Netherlands,E-Plus Group, KPN,

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