KPN reported fourth-quarter results showing revenues almost flat at EUR 3.37 billion compared to the year before and EBITDA sliding 3.2 percent to EUR 1.31 billion, with an EBITDA margin down 1.1 percentage points to to 39 percent. The net profit sank 63 percent to EUR 176 million, and earnings per share went 58 percent lower to EUR 0.13, including a Corporate Market (formerly Getronics Netherlands) restructuring impairment of EUR 298 million. Without the impairment, net profit fell 3.8 percent to EUR 457 million and EPS was down 3.2 percent to EUR 0.32. KPN said results were in line with its full-year expectations and that its objectives were achieved. The Netherlands performed below expectations despite some success booked for television and fibre, while Germany and Belgium boasted a good performance. For the full year, revenues were down 1.8 percent to EUR 13.16 billion, and EBITDA was down 6.2 percent to EUR 5.13 billion. Including the impairment, net profit declined 14 percent to EUR 1.54 billion, with EPS down 7.8 percent to EUR 1.06; excluding it, net profit rose 1.9 percent to EUR 1.83 billion, and EPS lifted 8.7 percent to EUR 1.25. KPN guided earlier for EBITDA at EUR 4.7-4.9 billion.
Meanwhile, KPN’s net debt/EBITDA ratio improved lightly in Q4 to 2.3x. The company aims to get the ratio to 2.0-2.5x. Pension funds coverage also improved, to 101 percent from 96 percent. No additional payments were made during the quarter but the KPN said it will pay EUR 21 million in Q1 and EUR 19 million in Q2.
On the back of a difficult market in the Netherlands, the company has lowered its 2012 guidance for sales and free cash flow. The company said 2012 will be a transition year, with a focus on turning around the Dutch Telco operations and stabilising the company’s market share in the broadband and mobile consumer market. KPN will considerably up investments and reorganise its Dutch Telco division. Of last year’s announced job reductions of 4,000-5,000, half of these will be at Dutch Telco and the other half from Corporate Market. In addition, KPN expects limited revenues from the sale of property and masts, resulting in significantly lower one-off gains than in 2011: to EUR 100 million in 2012 from 300 million the year before.
Combined with the effects of regulation, competition and the economic crisis, KPN now sees free cash flow for 2012 at EUR 1.6-1.8 billion, from its previous guidance of EUR 2.4 billion. Over 2011, the free cash flow reached EUR 2.4 billion. Capex for 2011 amounted to EUR 2.0 billion, at the lower end of the EUR 2.0-2.2 billion forecast. The operator expects to keep its 2012 dividend unchanged from 2011 at EUR 0.90 per share, but it did not confirm its 2013 dividend guidance of EUR 0.95 and said it will not buy back any shares this year.
On the AEX, KPN’s share price has fallen around 10 percent.
