KPN Q3 sales drop, sees full-year core earnings about flat

Credit: REUTERS/PIROSCHKA VAN DE WOUW

KPN NV, the largest Dutch telecommunications company, on Wednesday reported lower third-quarter sales and flat core earnings owing to the COVID-19 pandemic and forecast only fractional annual earnings growth.

Updates with quotes, details

AMSTERDAM, Oct 28 (Reuters) - KPN NV KPN.AS, the largest Dutch telecommunications company, on Wednesday reported lower third-quarter sales and flat core earnings owing to the COVID-19 pandemic and forecast only fractional annual earnings growth.

CEO Joost Farwerck said there had been a rise in pre-paid mobile subscribers but the company still faced "headwinds" among business customers because of the pandemic.

KPN said its full year EBITDAL would be around 2.32 billion euros, a touch above a revised 2.29 billion euro figure for 2019, a more tangible forecast than the "stable to growing" forecast it had issued in July .

Third quarter adjusted earnings before interest, taxes, depreciation and amortization, and after leasing costs (EBITDAL), for the three months ended Sept. 30, were 598 million euros ($708 million), compared with 599 million euros a year earlier. Revenues fell 5.4% to 1.30 billion euros.

That was slightly better than analyst forecasts in a company published poll that predicted EBITDAL of 581 million euros on revenue of 1.30 billion euros.

KPN, which competes with VodafoneZiggo and T-Mobile on the highly concentrated Dutch market, has suffered a decade-long decline in sales and Farwerck has said he does not expect a quick revival.

Instead the company will seek to grow operating profit slowly as it cuts costs and invests in its fibreoptic and 5G networks.

KPN shares are down 10% so far this year after receiving a boost on Oct. 12 on a media report private equity firm EQT EQTAB.ST was considering a potential bid for the company.

KPN and EQT did not comment on the report. The Dutch government has power to block telecom sector takeovers it deems a threat to national security, and in 2013 KPN used poison pill mechanisms to reject a takeover bid from Mexican billionaire Carlos Slim.

($1 = 0.8461 euros)

(Reporting by Toby Sterling; Editing by Rashmi Aich and Tomasz Janowski)

((toby.sterling@thomsonreuters.com; +31 20 504 5002;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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