Dutch incumbent KPN is on a roll. After beating analysts' earnings estimates in the first quarter of 2021, the operator has managed to repeat this feat in the second quarter (Q2) of the year.

According to Reuters, KPN reported Q2 adjusted earnings before interest, taxes, depreciation and amortization after leases (EBITDA AL) of €589 million (US$695 million), exceeding the €584 million expected in a company compiled poll.

The operator is clearly pretty pleased with latest developments following a tumultuous 2020 and has maintained its guidance for the full year. The positive results also come hot on the heels of KPN's firm rebuttal of two separate and "unsolicited" takeover bids from private equity firms EQT and KKR.

Figure 1: Did you hear: KPN has managed to keep up revenue momentum with the latest set of earnings.
(Source: KPN)

In a demonstration of its confidence, KPN said it intends to buy back shares worth €200 million euros ($235 million).

According to CEO Joost Farwerck, "the confidence in our strategic plan and successful execution gives us comfort around our multi-year cash generation perspective, enabling us to structurally return additional capital to our shareholders."

High in fiber

Highlights of the quarter include a return to mobile service revenue growth in the consumer segment for the first time since the first quarter of 2017, as well as the passing of 3 million homes with the fiber network.

"Today, almost half of all Dutch households have a fiber connection; the vast majority via KPN," Farwerck boasted.

"Thanks to the Glaspoort JV, which is now operational, we will be able to further accelerate our ambition and commit to jointly covering approximately 80% of the Netherlands with fiber by the end of 2026."

Glaspoort is the fiber network joint venture established with pension provider APG that became operational in June.

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In terms of the Q2 financial figures, adjusted revenue increased 0.2% year-on-year to €1.29 billion ($1.52 billion), while adjusted EBITDA AL was 0.6% higher. KPN posted a fairly hefty net profit of €800 million ($943 million), which was largely owing to a €649 million ($768 million) payment from the Glaspoort transaction.

In the first six months, adjusted revenue declined 1.4% to €2.58 billion ($3 billion) and adjusted EBITDA AL fell 0.3% to €1.15 billion ($1.35 billion). The net profit for the first half amounted to €941 million ($1.11 billion).

In terms of capex, €304 million ($358 million) was invested in Q2 2021. In the first half of the year, capex increased €53 million ($62.7 million) year-on-year to 24.2% of adjusted revenues (H1 2020: 21.8%) as investments in fiber rollout increased by €82 million ($92 million) – or 60% – to €218 million ($258 million).

KPN has reiterated its full-year 2021 outlook for adjusted EBITDA AL of about €2.34 billion ($2.76 billion), capex of €1.2 billion ($1.4 billion), and free cash flow of about €765 million ($902 million). KPN also said it intends to pay a regular dividend per share of €13.6 cents for 2021.

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— Anne Morris, contributing editor, special to Light Reading