Dutch telco KPN grew net profit 42% in Q1, as declining domestic earnings were offset by gains at its international unit.
KPN's Q1 profit jumps 42%
The company generated net profit of €449 million in 1Q10, compared to €317 million in 1Q09, and grew EBITDA 7.2% to €1.2 billion, however revenues were down 3.5% year-on-year to €3.28 billion.
That decrease was mainly due to KPN's Netherlands units, where earnings declined across the board. But revenue at its Mobile International unit increased by 1.8% year-on-year to €999 million.
Mobile International operates predominantly in Germany and Belgium, but its revenue from the rest of the world grew 81% to €29 million.
KPN CEO Ad Scheepbouwer said the company's 1Q performance was “solid” in the face of “top line pressure as a result of the economic conditions to the business markets and regulation.”
But he added that the company is maintaining its outlook for FY10, which targets EBITDA of over €5.5 billion in FY10, and revenue of €13.5 billion, in line with FY09.
Analysts predict that KPN's slowing performance in its European markets will be mirrored in the results of other major operators in the region.
BT's revenue is likely to be down between 3% and 4%, Deutsche Telecom expects a 2% to 4% ebitda decline, and analysts expect a 10% decline in service revenue for Telecom Italia, the Wall Street Journal said.
Bucking the trend will be Vodafone, which is likely to report that revenue from Europe was up 1.8%. But even this growth is small compared to its expected 9% increase in overall revenue.