KPN’s earnings fall again in second quarter, cuts dividends
Tuesday 24 July 2012
Despite a cost-cutting programme, telecoms group KPN on Tuesday announced a 25% decline in net profit to €315m due to intense competition from other providers and internet-based smart phone applications.
Turnover fell 3% to €3.2bn, the former state monopoly said.
Nevertheless, KPN did manage to sell more subscriptions over the past three months and says its new, flexible mobile phone subscriptions, designed to take advantage of increasing internet competition, are beginning to gather steam.
Earnings per share
While maintaining most 2012 forecasts, chief executive Eelco Blok said ‘the current challenging financial markets’ made it essential to reduce the company’s dividend forecasts. This is because the 'economic prospects in the Netherlands continue to be difficult and we are outside our financial framework range', Blok said.
In addition, the company continues to have ‘constructive dialogue’ with Mexican shareholder América Movil, which now owns around 28% of the company.
‘We will explore diligently any potential areas of cooperation that are viable, value accretive, in line with our strategy and in the interests of all shareholders and other stakeholders,’ Blok said in a statement.