LONDON (ShareCast) - Dutch telecom giant KPN reported a 63% drop in fourth quarter net profit to €436m due to “severe regulatory pressure and macroeconomic headwinds, while industry trends had a negative impact on overall performance.”

Fourth quarter sales dipped slightly to €3.38bn, settling just above the €3.35bn consensus estimate. EBITDA (earnings before interest, tax, depreciation and amortisation) slipped 6.2% to €1.32bn, missing the €1.37bn consensus.

The firm admitted that its business in the Netherlands didn’t meet its expectations, although Chief Executive Officer Eelco Blok attempted to assuage investors by pointing out the “strong underlying growth at attractive margins” in the international businesses.

In any case, KPN’s 2012 outlook sees no improvement. The company expects core profit for this year to drop to between €4.7bn and €4.9bn, from the €5.3bn earned in 2011.

Furthermore, although the telecom has confirmed its 2012 dividend it has decided to cancel its share buyback program. “The requirement to balance investments, including possible strategic investments such as spectrum and fiber, shareholder remuneration and a prudent financing policy in a period of macroeconomic uncertainty means there will be no share buyback program in 2012,” it said.

In a separate press release, KPN also announced that it intends to sell Getronics International (with operations in Europe, APAC and LATAM) in two separate transactions, for an undisclosed consideration.

After the report, KPN fell 7.49% to €7.90 in mid-morning trade.

JM

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