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Royal KPN back in the black
AMSTERDAM, The Netherlands (CNN) -- Dutch telecoms group Royal KPN posted its first quarterly profit in two years on Friday and said it would end the year in the black as it continued to cut costs. The company said third-quarter net profit totalled 68 million euros, compared with a loss of 231 million a year earlier, even though sales slipped by four percent to 3.06 billion euros. Its shares, which have gained a third in value in the past three months, were up 4.5 percent to 6.48 euros in early trading in Amsterdam on Friday.
KPN, which in the past year slashed jobs and sold non-core assets, said restructuring efforts would allow it to post at least an 18 percent increase in profit before deductions in 2002. The group -- the Netherlands' dominant carrier -- piled up 23 million euros in debt after a buying spree and network investments at the height of the technology surge. When the sector collapsed, KPN began selling many of its holdings -- including most of those in central Europe -- and arranged a 5 billion euro rescue package. KPN said on Friday its debt -- now at 15 million euros -- would fall to 13 billion euros by the end of the year, leaving it in better financial shape than many of its regional peers, like France Telecom and Deutsche Telekom. It also announced plans to sell TeleMedia Nederland, the country's leading directory company, for 500 million euros to a syndicate led by private equity group 3i and investment bank Veronis Sulher Stevenson. Proceeds from the sale will help reduce debt. "In the past year, KPN's position has been transformed. Our early emphasis on cash flow and debt reduction has been vindicated. In this third quarter, we have generated more than 1 billion euros of free cash flow," Chief Executive Ad Scheepbouwer said in a statement. "Once again, we are able to raise ... our targets for the full year at the same time as putting the financing of our mobile business on a proper footing for future growth."
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