KPN Earnings Rise as Consumer Phone, Web Business Improves

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Royal KPN NV, the largest Dutch phone company, reported second-quarter earnings that topped analysts’ estimates as rising consumer revenue offset the decline of its corporate business.

Adjusted earnings before interest, taxes, depreciation and amortization from continuing operations rose 1.5 percent to 602 million euros ($665 million), KPN said in a statement Wednesday. The average estimate in a Bloomberg survey of analysts was for 596 million euros. KPN agreed in April to sell its Belgian unit to Liberty Global Plc’s local arm for 1.33 billion euros.

The stock rose 2.3 percent in Amsterdam to 3.55 euros at 9:05 a.m. Shares of KPN have gained 35 percent this year, valuing the company at about 15.2 billion euros.

KPN is facing intensified domestic competition and can’t offset Dutch performance because it’s already sold most of its foreign assets over the past few years. Rivals Tele2 AB and Deutsche Telekom AG’s T-Mobile are increasing the coverage for 4G networks, while Liberty Global is building a cable company that can reach 90 percent of the Netherlands with bundled mobile, Internet and TV services.

Strong Consumer

“The trends that we’ve seen before continue,” Marc Hesselink, an analyst for ABN Amro Bank, said by phone. “Consumer mobile is very strong, but business is still very weak.”

Sales in KPN’s corporate division fell 11 percent, while adjusted Ebitda declined 20 percent. Earnings at the consumer mobile division rose 61 percent to 82 million euros while revenue grew 5.6 percent to 374 million euros.

Total sales, excluding the Belgian division Base, decreased 5.1 percent to 1.74 billion euros. The company forecast full-year adjusted Ebitda in line with last year’s earnings.

KPN’s largest shareholder is America Movil SAB, with 21.1 percent. The Mexican carrier in May sold 3 billion euros of bonds that can be exchanged into KPN shares, two years after billionaire Carlos Slim’s failed bid to take over the former Dutch phone monopoly.

KPN still holds a 20.5 percent stake in Telefonica Deutschland, a remnant of the 2014 sale of its German E-Plus unit. KPN received a dividend of 146 million euros for 2014 from Telefonica Deutschland and said it will in turn pay its shareholders 3.4 cents a share. KPN said it intends to pay 8 cents per share in dividend this year and payouts are expected to grow further from 2016, according to the company.

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