Royal KPN NV (KPN), the phone company partly owned by America Movil SAB, reported a third-quarter net loss on an impairment charge in Germany and forecast its shrinking business in Netherlands to stabilize next year.
The loss was 243 million euros ($332 million), compared with a profit of 267 million euros a year earlier, The Hague, Netherlands-based carrier said today. KPN slashed the value of its German business by 529 million euros. Stripping out the E-Plus unit being sold to Telefonica SA, earnings before interest, taxes, depreciation and amortization fell 14 percent to 743 million euros from a year earlier.
KPN, which has agreed to sell E-Plus to Telefonica in a sweetened 8.55 billion-euros transaction, last week rejected a 7.2 billion-euro offer by Carlos Slim’s America Movil for control in KPN after talks broke down over price. The Dutch carrier, which made 64 percent of its revenue last year in the Netherlands, will focus on its home market as it faces increasing price pressure from wireless competitors.
“The underlying fundamentals were a touch better in the Netherlands, especially in consumer residential,” said Frank Claassen, an analyst at Rabobank International.
While KPN’s Ebitda in the Netherlands declined 12 percent to 695 million euros during the quarter, revenue for the consumer residential business, which offers broadband Internet and television packages, climbed 7 percent to 489 million euros. Ebitda for the unit increased 5.1 percent.
“That’s definitely a reversing trend,” Claassen said.
KPN shares climbed as much as 2.8 percent and traded 1.9 percent higher at 2.28 euros as of 9:36 a.m. in Amsterdam. That pared the stock’s decline in the past 12 months to 35 percent. America Movil was working on a bid of 2.40 euros a share.
“Market conditions remained challenging in the third quarter,” Chief Executive Officer Eelco Blok said in the statement. “Nevertheless, our businesses in the Netherlands and Belgium are showing positive operational momentum.”
KPN is rolling out a high-capacity fiber-optic network in the Netherlands to offer high-speed Internet access and enable mobile traffic to be offloaded. Ziggo NV, a TV and Internet provider, plans to sell wireless service this year, competing with Sweden’s Tele2 AB, Vodafone Group Plc and Deutsche Telekom AG, as well as KPN for Dutch mobile users.
To contact the reporter on this story: Adam Ewing in Stockholm at email@example.com