KPN announces turnaround

Dutch telecoms group KPN has reported substantial profits after a year of heavy cost-cutting.

The business was close to collapse in 2001 after an acquisition frenzy at the height of the telecoms boom left it with debts of €22bn.

But in the first three months of this year it made a net profit of €770m, compared with a €348m loss this time last year.

The company has cut its debt to €11.2bn, and it said the figure would fall to €10bn by the end of the year.

KPN's profits were boosted by €657m from exceptional items. These were mainly gains from the sale of its directories unit and a penalty payment from the German mobile operator Mobilcom.

Before tax, the profit figure was €1bn, compared with €70m last time.

KPN shares fell 3 per cent to €5.86 in morning trade, in line with the DJ Stoxx telecoms index.

KPN tried to buy mmO2 in February, but the offer estimated at £9.3bn (€14bn) was rejected by the British cellphone operator.