KPN German profits fall

KPN German profits fall

Dutch Telecoms group KPN suffered a fall in third quarter profits after having to spend more on marketing in Germany to counter lower customer spending.

The announcement comes after KPN decided to sell its German unit earlier this year to ward off an aggressive stake acquisition by América Móvil.

Core profits of KPN’s German unit fell 9% despite E-Plus having been one of the company’s main profit drivers in the past.

The reduction also came despite a 210,000 rise in postpaid subscribers, with E-Plus’ customer base totaling 24 million.

The news was not so bleak in KPN’s home market, however, with its Dutch mobile business experiencing a 3.6% rise in core profit, reaching a margin of 34.4% compared to 28.7% the year before.

KPN’s overall core profit, adjusted for restructuring costs, was below the expectations of a Reuters poll of 10 analysts, falling 12% in the third quarter to €1.177 billion, below the €1.185 billion expected.

“Against an uncertain and challenging macro environment we have seen mixed performance across the group. We are on track in The Netherlands to reach our 2012 market share targets, where we continue to upgrade our mobile and fixed networks in The Netherlands to provide the highest quality of service. Commitment to our customers forms an integral part of our strategy, mainly illustrated by rising Net Promoter Scores. However, in Germany, competition on price has intensified in recent quarters which is leading to a slow-down in E-Plus’ top line growth. The growth from higher postpaid net adds is being offset by customers optimising their tariffs,” said Eelco Blok, CEO at KPN, in a statement.

The company maintained its 2012 outlook.