KPN reports dip in sales, profits in Q4

07 Feb 2007
00:00

(Associated Press via NewsEdge) Royal KPN, the Dutch telecommunications company, said fourth-quarter profit fell 31% after the company incurred a restructuring charge.

Net income dropped to 427 million euros ($555 million) from 618 million euros ($801 million) in the same period a year ago, the company said in a statement. Sales dropped 4.1% to 3.04 billion euros ($3.95 billion), mostly due to a decline in demand at KPN's fixed-line division.

The company took a 75 million euros ($98 million) charge in the quarter to restructure its newly acquired Telfort unit. Last year, KPN benefited from one-time gains of 274 million euros ($355 million) from a pension restructuring and as Japan's NTT Docomo unwound its investments in the business.

KPN said that operationally, a rise in earnings at its mobile telephony division outweighed a fall in its fixed-line operations. The company expects to return around 2 billion euros ($2.6 billion) to shareholders in 2007, split evenly between dividends and share buybacks.

KPN said that the transition all aspects of its business to an Internet compatible platform and the merger of its fixed-line and mobile operations by the start of 2010 would put a drag on earnings, balanced by the sale of real estate and more than 4,000 job cuts.

KPN has been benefiting from tax credits since it recovered from near-bankruptcy at the turn of the century after an acquisitions binge that was compounded by overpaying for 3G mobile telephony licenses.

© 2007 The Associated Press

© 2007 Dialog, a Thomson business. All rights reserved

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