Dutch telecoms giant KPN has posted a record loss, the largest in the Netherlands' corporate history.

KPN's problems stem from the underperformance of its German mobile phone subsidiary E-Plus, which is making little inroads in a depressed market.

Losses at KPN totalled 7.5bn euros (�4.5bn; $6.6bn), following a huge write-off on the E-Plus stake.

But even without the huge write-off and other exceptional costs, losses still doubled during 2001 to 1.4bn euros.

Difficult year

KPN is suffering under a staggering mountain of debt, which last year brought it close to collapse.

The company now says that it expects the situation to improve, with single digit sales growth this year.

Sales reached 12.4bn euros in 2001.

The past few years have been extremely difficult for KPN, as it spent a fortune on acquiring licences to operate third generation mobile phone networks and its E-Plus subsidiary.

At least investors were not unduly surprised. The company's results were in line with its profit warning issued last December.

"KPN certainly had a difficult year in 2001. But it managed its guidance pretty well and most of the reported numbers are in line with expectations," said Chris Brown, telecoms analyst at JP Morgan.

Restructuring business

To cut down debt, KPN has been selling assets outside its core markets - the Netherlands, Belgium and Germany - since the second half of 2001.

And KPN chief executive Ad Scheepbouwer confirmed that the company had no plans to sell E-Plus.

KPN has also launched a massive restructuring programme, which will lead to about 6,600 staff being made redundant by 2004.