January 31, 2018 / 7:36 AM / a year ago

UPDATE 1-Dutch telco KPN's Q4 results slip as roaming rules hurt

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AMSTERDAM, Jan 31 (Reuters) - Dutch telecom company KPN on Wednesday reported lower-than-expected fourth-quarter results, hurt by European rules limiting roaming fees for the use of mobile phones abroad.

Sales fell 6 percent to 1.61 billion euros ($2 billion), as the European Union put an end to hefty roaming charges, below the 1.65 billion euros expected by analysts in a Reuters poll.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 1.7 percent to 596 million euros, below the 610 million expected by analysts.

Core profit for the whole year held roughly stable at 2.4 billion euros, as KPN had forecast, and the company said it expects the same result for 2018.

Investments will amount to 1.1 billion euros this year, while free cash flow is expected to grow.

KPN offset the impact of roaming rules on the consumer market partly by attracting more customers, and by increasingly selling more mobile, internet and television services to each customer.

Revenue in the business market was again impacted by clients switching from traditional fixed lines to cheaper alternatives. But the decline of 1.4 percent was significantly smaller than in the previous quarter, as KPN reported strong growth in the sale of IT services to companies.

“We are on track to stabilise Business revenues”, outgoing chief executive Eelco Blok said in a statement.

Blok is to step down in April, to be replaced by Maximo Ibarra, former head of Italian mobile network operator Wind Tre.

$1 = 0.8034 euros Reporting by Bart Meijer; editing by Sunil Nair and Jason Neely

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