KPN Q1 beats on earnings, but sales take a hit
Dutch incumbent KPN clocked up €568 million ($683 million) in adjusted EBITDA AL during Q1 2021. Although it was an €11 million ($13 million) drop compared with the same quarter last year, it still beat analysts' estimates – as reported by Reuters – of €565 million ($680 million).
[Ed. note: Adjusted EBITDA AL is KPN's way of reporting numbers that are "adjusted for the impact of restructuring costs and incidentals and for lease-related expenses." The "AI" stands for "after leases."]
KPN, which saw adjusted revenue fall 2.9% year-over-year to €1.33 billion ($1.6 billion), put the better-than-expected adjusted EBITDA AL performance down to "continued disciplined cost control."
Adjusted EBITDA AL margin was 44%, up from 43.3% in Q1 2020.
OK, revenues were down, but it's not how it looks
Although the top-line took a hit, partly due to lower roaming revenue, KPN drew attention to some caveats. While adjusted revenues did indeed fall by 2.9%, the Dutch incumbent flagged an €8m ($9.6 million) one-off correction to Consumer Fixed service revenues related to the timing of revenue recognition in 2020.
It also noted the sale of KPN Consulting, which drummed up €15 million ($18 million) in revenues in Q1 2020. Strip those factors out of the equation, said KPN, and adjusted revenues would have fallen by a more sedate 1.2%.
Light Reading.
Fiber aggression
More alarmingly – at least at first glance – KPN's operational free cash flow slumped by 17% to €247 million ($297 million). The operator pointed out, however, this was mainly due to higher capex on account of "accelerated fiber rollout."
During Q1, KPN added 106,000 FTTH households to its fiber footprint, of which 8,000 were added through the acquisition of three fiber networks owned by Digitale Stad. KPN activated 77,000 new households with fiber through the quarter.
Last month KPN announced a fiber infrastructure JV with Dutch pension fund APG to accelerate FTTH rollout in rural areas.
KPN reiterated its adjusted EBITDA AL forecast of €2.35 billion ($2.83 billion) for 2021, which is slightly up on the €2.32 billion ($2.79 billion) reported in 2020.
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- KPN sticks to 2020 guidance despite impact of COVID-19
— Ken Wieland, contributing editor, special to Light Reading
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