KPN Q2 income down, restructuring blamed

Dutch telecoms company Royal KPN said its profit fell 12% in the second quarter, due to restructuring charges, higher financing costs and taxes, an Associated Press report said.

However, analysts say the company's underlying performance was better than expected and shares rose 5% to €10.64 (US$16.91) in Amsterdam, according to the report.

The company said net profit fell to €353 million (US$555 million), down from €401 million a year ago, while sales were up 22% to €3.66 billion (US$5.75 billion).

Notably, the company added 780,000 customers at its German mobile telephone arm E-Plus in the quarter, and it lost fewer fixed line customers in the Netherlands than in previous quarters, the report said.

The sales increase was largely due to KPN's €766 million acquisition of Getronics, a major IT services company, in October.

KPN's financing costs rose as a result, and taxes also increased as the company was unable to continue taking deductions for past losses.

KPN booked €221 million (US$347 million) in restructuring charges in the quarter, mostly due to a plan to cut 4,500 jobs by 2010. The company had 43,500 employees at year-end, the report further said.