Dutch telecoms operator KPN (Amsterdam: KPN.AS - news) announced Tuesday a first quarter profit that was slashed by more than half, saying it would pay no dividend in 2013 or 2014 because of a three-billion-euro rights issue.
Sales fell by 8.8 percent to 2.91 billion euros, hit by tough competition, the sale of KPN's computer services supplier Getronics and growing use of Internet services such as Skype and WhatsApp for voice and text communication.
"KPN is on track to realise the outlook that was provided with the 2012 results on 5 February 2013," the company said in a statement. "However the dividend outlook has been adjusted."
"Taking into account the expected launch of the rights issue shortly after the first-quarter 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.
KPN shareholders on April 10 approved a rights issue aimed at slashing the company's debt, hit notably by the 1.35 billion euros paid for 4G licences at the end of 2012.
Mexican billionaire Carlos Slim's America Movil owns 27 percent of KPN following a hostile takeover bid launched in 2012.
Slim approved the rights issue in exchange for naming two people to KPN's board of directors.
KPN, which employs around 30,000 people, was created when the state-owned PTT post and telecommunications was split up in the 1990s.