KPN Group's operating revenues for Q1 dropped from EUR 2.94 billion in 2004 to EUR 2.89 billion in 2005. The company's net sales declined marginally (EUR 30 million, or 1 percent ), following MTA tariff reductions of EUR 44 million, to EUR 2.838 billion at the end of Q1. KPN's operating profit declined by EUR 159 million to EUR 516 million, mainly due to additional investments in customer bases Mobile The Netherlands and E-Plus (approximately EUR 120 million) and UMTS amortization costs (EUR 64 million). The net profit for Q1 2005 amounted to EUR 273 million, 34 percent lower than EUR 414 million in Q1 2004.
Commenting, Ad Scheepbouwer, CEO of KPN, said: "We have gained market share in both broadband and mobile, our key objectives. This required major investment, but cash flow remained solid. We have met market expectations, and we have returned nearly EUR 1.2 billion of cash to our shareholders year-to-date. All our strategic initiatives are on track. We will launch our VoIP offering this month. I am pleased with a very resilient performance of KPN Mobile The Netherlands in the face of further MTA tariff reductions. We expect that its revenue and margin will rise during the remainder of the year."
