KPN returns to profitability

23 February 2004

AMSTERDAM — Dutch telecoms firm KPN reported on Monday it booked a EUR 2.7 billion profit after taxes last year, a far cry from its record EUR 9.5 billion loss in 2002, which it blamed on write-offs.

Excluding exceptional posts, profit after taxes came at EUR 655 million compared with EUR 163 million in 2002. Turnover rose marginally by 0.3 percent to EUR 12.2 billion, public news service NOS reported.

Excluding exceptional items, KPN recorded a EUR 178 million profit after taxes in the fourth quarter of 2004, compared with EUR 103 million in 2002.

The Dutch telecom’s company has reported slid progress on reducing its debt to EUR 8.3 billion at the end of last year compared with EUR 12.4 billion at the end of 2002.

“Despite the competitive market environment, we have managed to deliver cash flow ahead of market expectations and we are now in a position to reward our shareholders by resuming dividend payments, KPN chief Ad Scheepbouwer said.

“Our challenge is to invest in growing the business to secure and build the long-term
future. In this respect, I am satisfied with the strong growth in mobile customers, ADSL and imode, especially during the fourth quarter”.

KPN has not changed it earlier 2004 forecast, in which it expects a 5 to 7 percent decline in turnover from its telephone landline division, while it expects a 5 to 7 percent rise in turnover from its mobile phone division. It is forecasting a profit before tax of EUR 1.4 to 1.7 billion.

Subject: Dutch news