April 26, 2018 / 6:22 AM / a year ago

UPDATE 1-KPN hints at further improvement after unexpected Q1 profit rise

(Adds CEO quote, more detail)

AMSTERDAM, April 26 (Reuters) - Dutch telecommunications company KPN on Thursday beat expectations with a slight rise in first-quarter profits and said it should be able to further improve results in coming years.

“We believe there is significant scope for further improvement through increasing the digitalisation of our business, driving cost savings and potential new revenue streams”, newly appointed Chief Executive Maximo Ibarra said in a statement.

The improvement, however, is not expected to materialise this year, as KPN maintained its outlook for core earnings to remain flat in 2018.

First-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 2.3 percent to 569 million euros ($692.7 million), as cost cuts offset a decline in sales. That beat the 543 million euros expected by analysts.

Revenue fell 3.4 percent to 1.4 billion euros, as European rules limiting roaming fees for the use of mobile phones abroad hurt earnings.

After selling international operations in recent years, KPN now fully focuses on the Dutch market, offering bundles of mobile telephone, internet and television services.

Although the number of customers buying multiple services grew, sales on the consumer market fell by 2.6 percent, as KPN sold fewer handsets to go with its telephone subscriptions and roaming fees fell.

Sales at its business division fell 2.4 percent as customers continued to switch from fixed lines to IP alternatives.

$1 = 0.8214 euros Reporting by Bart Meijer; editing by Christian Schmollinger and Jason Neely

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