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Dutch telecom KPN targets ‘slight’ earnings growth in 2023

Dutch telecoms company KPN NV on Wednesday flagged a small increase in core earnings next year as it tackles inflationary pressures, knocking its shares even as it beat third-quarter expectations and confirmed its 2022 guidance.

The largest telecoms provider in the Netherlands had previously said it was targetting adjusted earnings before interest, taxes, depreciation and amortisation after leases of more than 2.40 billion euros ($2.39 billion) this year, and more than 2.45 billion in 2023.

“We think that this is effectively a downgrade (albeit a small one) to 2023 guidance,” Credit Suisse analysts wrote in a note to clients.

KPN shares were down 2.9% at 0910 GMT.

European inflation has surged in the past year, driven by record gas prices as Russia curbed supplies following its invasion of Ukraine and Western sanctions against Moscow.

KPN expects to have cut back its energy consumption by 8-10% between 2021 and next year, finance chief Chris Figee said in a call with reporters.

“We are looking at moving as much as possible to solar energy but it’s quite a struggle still to get the solar panels in the volumes that we need,” CEO Joost Farwerck said, also pointing to temperature adjustments in data centres as a way to cut costs.

The group said it had spent a total of 6 million euros in one-off payments to employees to help them cope with the rising cost of living. Farwerck said the amount was not the same for all employees.

KPN reported adjusted EBITDAAL of 618 million euros ($616 million) for the three months ended Sept. 30, beating the 611 million euros expected by analysts in a company-compiled poll.

It will give more 2023 guidance when it publishes fourth-quarter results in January. Reuters

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