Koninklijke KPN NV, the Netherlands’ largest telecommunication company, on Tuesday reported a heavy second quarter net loss as it wrote down the value of licenses to offer third-generation (3G) mobile services and said it is reviewing its position in Belgium.
KPN, headquartered in The Hague, Netherlands, posted a net loss of 9.3euro billion (US$9.2 billion as of June 30, the last day of the period being reported.) This compares to a net loss of 499euro million in the same period a year ago, KPN said in a statement.
KPN took a charge of about 9euro billion to account for the lower value of its mobile telephony assets in Germany and Belgium. The charge reflects a goodwill impairment as well as a write down on 3G licences, KPN said. The Dutch carrier also wrote down its 15 per cent stake in Hutchinson 3G Holdings Ltd. in the U.K., which it no longer regards as a strategic asset, KPN said.
Excluding charges, KPN said its second quarter loss amounted to 79euro million, compared to a 354euro million loss in the year-ago period. Sales for the quarter excluding special items came in at 3.08euro billion, down 3 per cent from 3.17euro billion, KPN said.
KPN continues to restructure and sell noncore assets to further reduce its net debt, which stood at euro15 billion on June 30, slightly reduced from 15.4euro billion at the end of the first quarter, the company said. As part of the restructuring, KPN reduced its headcount to 23,071 from 29,377 at the beginning of the year.
As part of its self-evaluation, KPN has concluded that it can’t make its Belgian unit, KPN Belgium, profitable on its own. The company is in talks with a number of parties on cooperation on the Belgian market, KPN said. KPN Belgium offers telecommunication services to business users. The company has its own fibre-optic network.