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KKPNY OTCM· Koninklijke KPN N.V.
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KKPNY OTCM· Koninklijke KPN N.V.
Earnings report Q2 2003

KPN Shows Strong Revenue Growth in Latest Quarter

Segments of revenue

KPN reported strong revenue growth across its segments in the latest quarter. The company's total revenue increased by 5% to EUR 1.4 billion. The largest segment, E-Plus, which is KPN Mobile's German unit, achieved a new record in its 10-year history with 7.6 million customers. E-Plus reported an average monthly customer growth of 75,000 since the end of March. This growth in customer base contributed to the overall revenue growth of the company.

Strengths

KPN's strong revenue growth can be attributed to several factors. Firstly, the company's successful debt reduction strategy has been recognized by leading credit rating agencies, Moody's and Standard and Poor's. Moody's upgraded KPN's credit rating from Baa2 to Baa1 with a stable outlook, while S&P raised the credit rating from BBB to BBB+ with a positive outlook. These credit rating upgrades reflect KPN's efforts to reduce financial risk and improve operational performance. Additionally, KPN's management expressed confidence in further reducing the net debt position to approximately EUR 10 billion in 2003. This debt reduction strategy has positively impacted the company's financial performance and contributed to its revenue growth.

Challenges

While KPN has shown strong revenue growth, there are some challenges that the company may face. One potential challenge is maintaining its competitive position and operating performance. S&P's credit rating upgrade assumes that KPN will pursue a conservative and controlled strategy and does not experience any weakening in its competitive position or operating performance. Therefore, any deviation from this assumption could impact the company's credit rating and future revenue growth.

Noteworthy

The noteworthy aspect of KPN's performance in the latest quarter is the significant growth achieved by its German unit, E-Plus. E-Plus added an average of 75,000 customers per month since the end of March, reaching a milestone of 7.6 million customers. This strong customer growth highlights E-Plus' commitment to delivering profitable growth and contributes to the overall revenue growth of KPN.

Summary

KPN has shown strong revenue growth in the latest quarter, driven by the success of its debt reduction strategy and the strong performance of its German unit, E-Plus. The company's total revenue increased by 5% to EUR 1.4 billion. KPN's credit rating upgrades by Moody's and S&P reflect the positive prospects for the company and its efforts to reduce financial risk. However, maintaining its competitive position and operating performance will be crucial for sustaining future revenue growth. Overall, KPN's performance in the latest quarter demonstrates its ability to deliver profitable growth and solidify its position in the market.

Source documents

Form 6-K  filed on Jun 27, 2003
1 pages scanned

Reference data

Company financials Q2 revenue 1.39B
Analyst estimates Q2 EPS beat by 11.68%
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