Dutch telecoms group KPN announced today it would start returning cash to its shareholders and raised some of its full-year forecasts despite posting lower-than-expected third-quarter net profits.
KPN proposed a 2003 dividend of 12 cents per share. Previously the group - which last paid a dividend in 2000 in shares - had said it would not announce whether it would resume a dividend until the release of its full-year figures.
Investors have been clamouring for recovering European operators, such as Deutsche Telekom and France Telecom, to start returning some cash.
After an over-ambitious buying spree saddled it with a debt mountain that peaked at €23 billion ($26.3 billion), KPN has spent two years slashing costs, generating a strong recoveryin margins.
Its net debt has fallen to €9.4 billion, and the company expects it to drop to €9 billion by year-end.
KPN reported a third-quarter net profit of €172 million, more than triple the profit from a year ago but below analysts' average forecast of €206 million. The profit excludes charges totalling €33 million.