KPN Q4 results, outlook meet expectations

Wednesday 31 January 2018 | 08:00 CET | News
Update: 31 January 2018 | 11:14 CET

KPN reported fourth-quarter results in line with expectations. Revenues at the Dutch operator fell 6.3 percent to EUR 1.614 billion, equal to a 5.3 percent decline on an underlying basis, and adjusted EBITDA was down 1.7 percent to EUR 596 million. This improved the margin to 36.9 percent from 35.2 a year ago. 

Free cash flow (EBITDA - capex) declined to EUR 166 million from EUR 328 million. 

Revenues in the Netherlands, excluding the international carrier iBasis, fell 2.5 percent year-on-year and were down 0.7 percent excluding regulatory effects. KPN said it saw growth in ARPU per household and in integrated business services. This was offset by price pressure in the mobile market and lower international traffic. The group's cost savings are on track, and the target for end-2019 was increased to EUR 350 million from EUR 300 million. 

For 2018, KPN forecast stable EBITDA, capital expenditure of EUR 1.1 billion and higher free cash flow (excluding the dividend from its 8.6 percent stake in Telefonica Deutschland).

KPN Consumer revenues down 1.4%

KPN reported quarterly revenues at the consumer division of EUR 791 million, down from EUR 802 million a year earlier. Business revenues fell 1.4 percent, to EUR 565 million. Wholesale revenues totaled EUR 162 million, while the Network, Operations & IT division recorded revenues of EUR 5 million. 

Consumer revenues were split EUR 484 million from fixed and EUR 307 million from mobile. Fixed services were sold largely through bundles. KPN served 3.574 million households at the end of the period, of which 2.3 million only fixed and 1.3 million with both fixed and mobile. The company also had 874,000 dual-play subscribers in fixed and 1.696 million triple plays.

Quad play now bigger than postpaid alone

At year-end, KPN counted 5.241 million mobile connections, of which 1.57 million prepaid. Postpaid showed a turning point in Q4, with now more connections part of the KPN Compleet fixed-mobile offer (1.886 million) than standalone postpaid users (1.788 million).

ARPU per fixed household rose by EUR 1 to EUR 44 per month, but the number of RGUs was unchanged at 1.9 services per household.

Fewer customers for SME services

Revenues from SME services totaled EUR 214 million, while large corporates generated EUR 284 million. New services contributed EUR 40 million in sales. KPN Zakelijke Markt counted 1.9 million mobile connections, of which 1.204 million are considered SMEs. Exactly 1 million of those are mobile-only. Traditional services declined in number. KPN had 382,000 business telephony connections and 104,000 broadband lines at year-end, down respectively 19 and 24 percent year-on-year. 

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