19 September 2018Reading time: 2 minutes

The second quarter revenue of 2018 dropped with 1,5 percent to 1,4 billion euro on an annual basis. This decline is especially due to the lower yields of mobile data traffic. Since June 2017, telecom companies are no longer permitted to charge extra costs for mobile traffic data within EU countries. The ebitda of KPN rose in the past quarter with 1,3 percent to 577 million euro, which is due to the implemented cost reductions. The net profit declined on an annual basis with 15 percent to 137 million euro. KPN expects that it will still meet all their goals this year, in which they, among other things, count on an ebitda that is in line with that of 2017. Last year the ebitda was 2,4 billion euro.

In the Netherlands, KPN suffers from a shrinking mobile market. A research from Telecompaper early September, showed that the revenue from mobile services over the second quarter in the Netherlands has dropped with more than 8 percent to 938 million euro on an annual basis. For the whole of 2018, Telecompaper counts on a revenue decline of approximately 4 percent to 3,9 billion euro. In the following years this decline will continue to a revenue of 3,7 billion euro in 2022.

Meanwhile KPN also suffers from a increasing pressure of competitors within the Netherlands. Vodafone has already merged with Ziggo, and by the end of 2017 T-Mobile Nederland and Tele2 also announced a merger. This would mean that there would only be three large telecom companies left on the Dutch telecom market with their own mobile network in the Netherlands. However, the intended merge has still not be completed because the European Commission has objections. Therefore it remains to be seen if the merge between T-Mobile Nederland and Tele2 will happen and which consequences this will have for KPN.

The stock price of KPN has declined strongly since the presentation of the second quarter results in July. Compared to that moment, the stock price is now (September 13th, 2018) 11,7 percent lower at 2,26 euro. Compared to a year ago the stock price is even 23,7 percent lower. The future price of the stock is subject to several political, industrial and sector specific as well as economic factors. Investors should consider these risks when making their investment decisions. Developments can be different at any time than investors anticipated on, which could result in capital losses.

Vontobel products for KPN are available at DEGIRO.

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02/03/2021 09:06:08