Royal KPN’s Q2 profit falls by 12% (Denmark)
Royal KPN’s second-quarter net profit fell 12% due in part to a higher tax rate and higher interest, but shares rose after the it raised the outlook for its domestic business.
According to KPN, net profit for the three months ending June 30 was EUR353 million compared with EUR400 million a year ago, below analysts’ expectations for net profit of EUR380 million.
But at its domestic business, KPN said it now sees flat earnings before interest, tax, depreciation and amortization compared with its previous guidance for a EUR100 million Ebita decline.
Telco sector shares across Europe were also boosted after Vodafone Group said it planned a GBP1 billion share buyback program. Its stock fell more than 13% Tuesday after it said it expects full year revenue to be at the low end of its guidance amid weakening economic conditions, particularly in Spain.
KPN Wednesday confirmed its outlook for 2008, reiterating that capital expenditure for the year is expected to be approximately EUR2 billion and free cash flow at least EUR2.4 billion.
KPN’s second quarter revenue and other income came in at EUR3.66 billion, driven by acquisitions and the consolidation of Getronics and iBasis. Second-quarter revenue was 22% above the EUR3.01 billion reported last year, topping analysts’ expectations for EUR3.62 billion.
Earnings before interest, tax, depreciation and amortization fell 0.6% to EUR1.27 billion.The company said second-quarter Ebitda includes a EUR34 million contribution from Getronics, a EUR199 million release of pension provisions and a restructuring charge of EUR221 million, the majority of which is related to 4,500 jobs which will be cut by 2010.
However, stripping for one-off efects of real estate gains, restructuring charges and pension provision, underlying second-quarter Ebitda rose 3.9%.
