Dutch telecom KPN to issue €4bn in shares

Dutch telecoms operator KPN announced Tuesday it would undertake a 4-billion-euro rights offer after 2012 profits more than halved to 693 million euros ($935 million). With profits slashed 55 percent or 856 million euros year-on-year, the company said its share issue would "strengthen KPN’s balance sheet and is intended to provide a stable financial position in the coming years." "Adverse macro-economic conditions continued to weigh on consumer confidence and on the investment plans of our business customers," KPN chief executive officer Eelco Blok. "The financial performance of our businesses in 2012 was largely within the outlook ranges, though supported by asset disposals and somewhat below our expectations at the start of the year." The rights issue aimed at slashing the company's debt will be put to shareholders at its AGM on March 19, KPN said in a statement, adding that it could ultimately be higher than 4 billion euros. Revenue slid by 3.5 percent or 455 million euros in 2012 to 12.71 billion euros, a situation the company blamed on weak telecom sales and the sale of computer services supplier Getronics International. The removal of Getronics figures from KPN group's accounts decreased turnover by 362 million euros, the company said. KPN said it had just achieved its 2012 targets with earnings before interest and tax, or EBITDA, of 4.7 billion euros, excluding restructuring costs. That was however achieved only thanks to the sale of assets, including mobile telephone base towers in Germany and the Netherlands and the sale of KPN Spain. More than half of KPN's business is in the Netherlands, where the company has suffered from increased use of Internet-based communications applications such as Skype to the detriment of traditional fixed line and mobile telephony. KPN, which employs around 30,000 people, was created when the state-owned PTT post and telecommunications was split up in the 1990s.