KPN announced a small rise in adjusted revenues and EBITDA in the second quarter, saying its strategy to restore growth is on track. Adjusted revenues rose 0.2 percent year-on-year to EUR 1.3 billion, and adjusted EBITDA was up 0.6 percent to EUR 589 million. Free cash flow increased 1.2 percent to EUR 179 million, and KPN said it has around EUR 200 million available for a share buyback this year.
The EBITDA margin improved to 45.5 percent, while EBIT was around four times higher at EUR 1.1 billion. Net profit jumped to EUR 800 million from EUR 135 million a year ago. KPN increased capex 3.3 percent from a year earlier to EUR 304 million in Q2, leading to a 2.1 percent drop in operational free cash flow, to EUR 284 million.
The Dutch operator maintained its outlook for results in 2021 and 2023. The expectation is results in the SME segment will stabilise by the end of this year and KPN aims to return to growth in the 'mass market', including consumer SME and wholesale. In 2021, it targets EBITDA of EUR 2.345 billion, capex at EUR 1.2 billion, free cash flow of EUR 765 million and a higher dividend of 13.6 cents per share. By 2023, EBITDA should grow to at least EUR 2.45 billion and free cash flow EUR 870 million, while capex comes down slightly to EUR 1.1-1.2 billion to support annual growth of 3-5 percent in the dividend.
Consumer mobile service revenues higher
KPN posted flat sales on the consumer market, at EUR 706 million, while business revenues fell 4.7 percent to EUR 430 million, and wholesale increased 9.0 percent to EUR 163 million. In the core mass market segment, service revenues rose 0.5 percent. This was led by the wholesale growth, with consumer services down 0.7 percent and SME services off 3.1 percent.
KPN did report a return to growth in consumer mobile service revenues, its first growth in four years with an increase of 1.3 percent, while consumer fixed revenues were still down 1.4 percent.
Postpaid consumer mobile subscribers rose by 16,000 in the quarter to 3.60 million, while prepaid was down by 12,000 to 913,000. Broadband subscribers increased by 15,000 on a quarterly basis to 2.8 million, helped by the takeover of Oxxio (22K lines), and KPN also added 47,000 FTTH lines.
Postpaid ARPU was stable at EUR 17, and fixed ARPU rose slightly to EUR 49. The total number of households served rose by 12,000 to 3.55 million, while FMC households were flat at 1.48 million.
SME lines growth
In the business market, KPN lost a net 3,000 broadband lines due to a clean-up of the customer base. In the SME segment, broadband customers grew by 7,000. Mobile also added 32,000 lines, including 17,000 at SMEs. Business fixed lines were down by 4,000, on the continued drop in PSTN. ARPUs were down slightly, to EUR 17 for mobile and EUR 71 for broadband.
At the network unit, KPN added 113,000 FTTH lines in the quarter for a total of just over 3 million homes passed. Including 12,000 lines at the new Glaspoort venture and 91,000 lines on third-party networks, KPN's total fibre footprint was 3.106 million lines. The number of active lines rose by 56,000 to 1.54 million.
