KPN cost cutting pays off in Q2 results
Dutch telecoms group KPN has reported better-than-expected Q2 core profits after the company’s cost-cutting plan made up for poor results in most of its units.
The company has implemented a simplification programme – designed to generate savings in operational and capital expenses of approximately €75 million – and cut 350 of its workforce.
After its poor Q4 2013 results, the company declared it would be cutting an additional 2,000 jobs.
While core profits did fall in Q2 by approximately 19% to €633 million, it still beat analyst expectations.
KPN’s CEO Eelco Blok was bullish after the results, and said KPN had now beat the worst in terms of falling profits. The company is confident that its financial performance will stabilise by the end of 2014.
“We expect the results in the second half to be better than those in the first, so in that sense you could speak of a trough or that we have passed it,” said Blok.
KPN is expected to invest less than €1.4 billion in 2014 and less than €1.5 billion in 2015 on its network.