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Investing.com -- Dutch telecom provider KPN reported third-quarter group service revenue that fell 1% below consensus estimates, with year-over-year growth slowing to 1.7% compared to 3.7% in the second quarter and 3.1% in the first quarter.
Business service revenue missed analyst expectations by 2%, while Consumer and Wholesale segments were in line with forecasts. The company’s shares dropped 1% following the announcement.
Consumer mobile service revenue grew by just 1%, showing an unexpected slowdown from the 1.3% growth reported in the previous quarter.
Adjusted EBITDA AL (earnings before interest, taxes, depreciation, and amortization after leases) matched consensus expectations with 4.4% year-over-year growth, down from 6.4% in Q2. When adjusted for a favorable IPR settlement, Althio, and a holiday provision, underlying EBITDA growth was 2.3%, below the 4.0% in Q2 and 3.1% in Q1. The third-quarter margin reached 46.1%, up from 45.3% in the previous quarter.
Capital expenditure came in 3% above consensus estimates, which combined with the in-line EBITDA resulted in operating cash flow 2% below expectations.
Free cash flow reached €298 million, exceeding consensus by 17% or €43 million, primarily due to a more positive working capital contribution.
In operational trends, KPN’s Consumer segment showed broadband net additions of 11,000 (compared to 13,000 in Q2) with ARPU (average revenue per user) up 1%. Mobile postpaid net additions increased to 47,000 from 37,000 in Q2, though ARPU declined 1.0%, an improvement from the 1.4% decline in the previous quarter. The Wholesale segment saw its broadband base decline by 20,000, similar to the 21,000 decrease in Q2.
KPN reaffirmed its 2025 guidance, projecting service revenue growth of approximately 3% (against consensus of 3.1%), EBITDA AL above €2,630 million (consensus:€2,632 million), capital expenditure of around €1,250 million (consensus:€1,253 million), and free cash flow above €940 million (consensus:€942 million).
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