KPN: Tax deal to lift earnings
AMSTERDAM, Netherlands (Reuters) -- Shares in KPN jumped on Wednesday after the telecoms firm struck a deal with Dutch tax authorities over its German cellphone unit E-Plus and a restructuring of KPN Mobile which will boost its 2003 net result by 1.08 billion euros ($1.38 billion).
The Dutch phone company, due to publish 2003 results on Monday, said the increase in its net result would help strengthen its equity.
KPN shares rose as much as eight percent after the news, and stood 6.8 percent higher at 7.06 euros at 0810 GMT.
"This is a major positive," broker Bank Oyens & Van Eeghen said in a note. "The deal has made us much more positive in the short term. The deal is much better than we had hoped for, as indications had been that the Dutch tax authorities were quite reluctant to help KPN."
KPN and its KPN Mobile arm do not expect to pay taxes before 2006, KPN said. This is a year later than earlier indicated, analysts said.
"The discussions on the fiscal valuation of E-Plus have led to a temporary tax loss attributable to the German branch of KPN Mobile amounting to 11.5 billion euros," KPN said in a statement.
"This loss will be recaptured by any future profits of E-Plus, reversals of impairments on intangibles to a maximum of two billion (euros) or by a fiscal book gain on a theoretical sale of E-Plus."
KPN's German operations are treated as a German branch for Dutch tax purposes, it added.
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