Swisscom boosts profit and raises outlook
Switzerland's largest telecoms firm, Swisscom, has announced that its first-half results were positively influenced by the acquisition of Italy's FastWeb provider.
Swisscom, which is controlled by the Swiss government, beat market forecasts with a 23.5 per cent rise in net profit to SFr936 million ($782.2 million) and raised its outlook for the year as a whole.
The former state monopoly, which is based in Bern, reported that turnover rose 6.7 per cent to SFr5.09 billion in the first six months.
It lifted its forecast for full-year turnover to SFr11.2-SFr11.3 billion and for earnings before interest, tax, depreciation and amortisation (Ebitda) to SFr4.4-SFr4.5 billion.
Swisscom purchased broadband operator Fastweb earlier this year for €3.1 billion (SFr5.12 billion) and took on another €1.1 billion in debt.
The Milan-based company last week reported its first quarterly profit and repeated that sales would rise by 30 per cent this year.
Swisscom bought Fastweb seeking growth to counter stalling fixed-line turnover in Switzerland. It has been losing market share at its fixed-line unit since Switzerland opened its phone market to competition in 1998.
The company has been seeking to add more high-speed internet lines and has begun internet television services (Bluewin TV) to reclaim market share from cable operators.
Revenues for the Fixnet unit fell in the first half by 5.3 per cent to SFr1.947 million.
But the company pointed out that the number of fixed lines, including broadband, increased by 3.5 per cent to 5.22 million.
Broadband communication, it said, continued to enjoy "strong growth", with broadband access lines increasing within a year by 20 per cent to 1.5 million.
"Swisscom posted solid results, which basically confirmed the existing trends," commented Bank Vontobel analyst Panagiotis Spiliopoulos.
At the beginning of this month Swisscom replaced its Fixnet, Mobile and Solutions units with divisions for private clients, small and medium-sized enterprises and corporate businesses in the largest overhaul since Carsten Schloter became chief executive last year.
Swisscom shares had fallen by more than 11 per cent this year before Wednesday's announcement.
swissinfo with agencies
First-half 2007 figures
Turnover: SFr5.094 billion (+6.7% compared with previous year)
Ebit: SFr1.228 billion (+10.6%)
Net income: SFr936 million(+23.5%)
Employees at June 30: 20,498 (+22.5%)
The Swiss government has a 54.81% stake in Swisscom.
The company has said its total number of fixed, broadband and mobile customers hit the ten million mark for the first time, in addition to 1.2 million customers acquired with the purchase of Fastweb.
Swisscom has given written notice to the New York Stock Exchange of its intention to delist its ordinary shares and American Depositary Shares from the NYSE.
The decision has been taken to reduce both costs and the complexity of complying with two sets of regulations.
Swisscom says the trading volume for its securities is low in the United States compared with virt-x in London.
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