KPN has cancelled its dividend for 2013 and 2014 as revenues and profits tumbled in the first three months of the year.

Q1 revenues fell 8.8 percent year-on-year to €2.9 billion while net profit was down 54 percent to just €140 million.

Capex, meanwhile, rose 16 percent to €535 million over the same period as investment in its 4G LTE network began to take its toll.

KPN saw revenues decline across all of its major business areas apart from consumer residential in its home market.

Revenues grew 9.4 percent, to €501 million, in that segment thanks to growth of the IPTV, FttH and broadband customer base.

KPN said it holds the number two position in the Dutch TV market with almost a quarter of the market thanks to the popularity of its triple-play packages.

A further 30,000 customers have signed up for quad-play packages, which launched in January, it added.

The FTTH customer base, meanwhile, grew by 10,000 in Q1 and now numbers 399,000 in total.

However, mobile revenues were down across the board, even in Germany and Belgium, which have been performing well of late.

CEO Eelco Blok said the overall performance was “on track with the updated strategic agenda we presented in February”.

A major part of this this agenda was a plan to raise €4 billion in equity, mainly through a €3 billion rights issue, which got approval earlier this month.

However, there is still a need to cut costs as evidenced by the cancelling of the dividend.

“Taking into account the expected launch of the rights issue shortly after the Q1 results publication and the fact that the rights issue will lead to a higher number of shares outstanding, KPN has decided to pay no dividend for the financial years 2013 and 2014,” it said in a statement.

The dividend will resume after that timeframe “subject to operational performance and financial position”.

Last month, KPN announced it is to sell its Infrastructure Services & Projects business to SPIE Nederland for an undisclosed figure.

In February, it agreed a deal with Alcatel-Lucent to outsource its fixed network.

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