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Dutch telecom KPN: Core earnings, dividend to grow from 2021

The largest Dutch telecommunications company, KPN NV, said on Tuesday its core earnings and dividends will grow from next year as it cut costs and accelerates investment in its fibre optic network.
“KPN will double the number of households with high speed internet by 2025,” the firm said in a strategic update, adding that it would spend up to 3.5 billion euros ($4.15 billion) over the next three years.

Chief Executive JoostFarwerck repeated the company’s 2020 forecast for adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), and after leases, of 2.32 billion euros, its preferred measure. He said that figure would grow to 2.45 billion euros by 2023, with dividends increasing by 3-5% annually.

The statement did not address recent reports that private equity firms could be interested in buying KPN or its fibre optic networks.

Farwerck has indicated the company is not interested in being purchased, and KPN has said fibre optic rollout is a top strategic priority as, along with 5G mobile networks, it will be key to telecommunications in future years.

KPN said it would cut 250 million euros in annual costs in the 2021 period. The company has suffered from a decade-long decline in sales but underlying profits have generally held up due to cost cutting. Farwerck said new projects would include savings on IT projects and reducing office use.

Farwerck said the country’s need for better connections had become more important with so many people working from home because of the COVID-19 pandemic.

The number of households with fibre optic links will be increased to 65% in 2025 from roughly a third now, the company said, as it adds 500,000 new connections each year from 2021. Reuters

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