(Reuters) - KPN will keep a close eye on energy usage this year partly by modernising its network, its finance chief said, as the Dutch telecoms company seeks to maintain profitability in the face of tough cost pressures.
Finance chief Chris Figee, said on Tuesday KPN's energy bill was expected to rise by 50-55 million euros in 2023, adding that there was "still a lot to be gained" from energy savings.
To mitigate this, Figee told reporters the group would keep reviewing its energy usage by modernising its network with smart meter and monitoring systems, and by introducing solar panels.
"For 2024, if ... the market doesn't go berserk again, that means we will no longer have another energy uplift ... which will probably help our EBITDA in 2024," Figee, speaking to analysts, added.
Soaring consumer prices and slowing economies are creating new challenges for telecom operators, who have seen profitability eroded in by cut-throat competition and the need to invest in fibre and 5G networks.
The largest telecoms provider in the Netherlands forecast adjusted core earnings after leases (EBITDAAL) of around 2.41 billion euros ($2.61 billion) in 2023, compared with 2.40 billion last year.
It said the outlook included a more than 100 million euro hit from higher costs of energy, labour and leases.
"A combination of tight cost control, reducing the cost drivers, and pushing for productivity increases ... should help us compensate this cost head," Figee said.
He also said tough 2022 comparisons, energy costs, and wage increases agreed with unions in December would cause the group's core profit to decline in the first quarter, followed by a recovery later in the year.
KPN forecast a free cash flow of around 870 million euros for 2023, against 862 million last year.
Credit Suisse (SIX:CSGN) analysts said the core profit outlook was "a touch light" but the cash flow target was 2% above consensus.
The group's core profit in the final quarter of 2022 was 598 million euros on sales of 1.37 billion euros, in line with analysts' expectations.
Its shares were up 2.5% at 1420 GMT, leading gains on Amsterdam's AEX index that fell 0.3%.
($1 = 0.9227 euros)