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The Hague (pte040/01.03.2005/14:30) - Dutch telecoms giant KPN http://www.kpn.com has responded to the profit collapse of last year by announcing it plans to reduce jobs. "We anticipate that annual reductions in headcount of between 1,500 and 1,750 employees will unfortunately be inevitable until 2010," said the company's CEO Ad Scheepbouwer. KPN expects to realise annual cost savings of 850 million euros from 2010 onwards, the company reported today in a press release on its website. The company announced a dividend of 0.35 euros for 2004.
In 2004, the Dutch telecoms giant experienced a six per cent drop in year-on-year revenue to 12.1 billion euros. Profits after tax were almost halved, falling to 1.51 billion euros. In 2003, the company had post-tax profits of 2.7 billion euros. In the fourth quarter alone, the profits plummeted from 1.6 billion euros to 479 million euros. However, the final quarter's operating revenues stabilised at around 3 billion euros. Both the fixed and mobile divisions in the company, however, reported some successes. Net sales of the mobile division grew 6.2 per cent to 5.2 billion euros in 2004, and the company's ADSL customer base doubled to 1.4 million connections.
According to Scheepbouwer, in the coming year, KPN wants to further develop in broadband and VoIP. "This will have consequences for short-term profitability, but will position us strongly for today's market and deliver greater benefits in the future," he said. "We feel confident that our strategy of attacking the market for new services to secure market leadership in the Netherlands, whilst continuing to defend vigorously our Dutch fixed and mobile positions to retain cost leadership, will sustain the Group's strong cash flow," he added.
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