Meanwhile, operating profit before depreciation and amortization (EBITDA) increased by 3.4 percent to CHF 4.36 billion, the telecommunications group announced on Thursday. The increase was mainly due to a change in accounting for operating leases (IFRS 16), which increased the result by 200 million francs.
On the other hand, a provision for job cuts amounting to CHF 56 million weighed on the result. On an adjusted basis and at constant currencies, EBITDA would have remained stable (+0.1 percent), the company wrote.
On balance, Swisscom posted a net profit of CHF 1.67 billion. This is an increase of 9.7 percent compared with the previous year. The reason for the significant increase is the corporate tax reform. Shareholders are to receive a dividend of 22 francs per share - as they have for years.
The "blue giant" thus exceeded the expectations of the financial community in terms of sales and net profit, and more or less met them in terms of EBITDA. Analysts had on average (AWP consensus) expected sales of 11.4 billion, EBITDA of 4.34 billion and a net profit of CHF 1.6 billion.
Further job cuts
Swisscom was able to largely offset the decline in its core business with ongoing cost-saving measures. Swisscom exceeded its target of reducing the annual cost base in Switzerland by CHF 100 million each by 2020 in 2019. In the reporting year, the number of full-time positions in the Group fell to 19,317, 2.7 percent fewer than in the previous year. At the end of 2019, Swisscom offered 16,628 full-time positions in Switzerland, 3 percent fewer than in the previous year.
The Italian broadband subsidiary Fastweb, which is also active in mobile communications, again recorded an upward trend. Revenue climbed by 5.4 percent to 2.22 billion euros. Operating profit also increased.
The company is targeting slightly lower sales of around 11.1 billion for 2020, according to the statement. EBITDA is expected to be around 4.3 billion, and capital expenditure around 2.3 billion. If the targets are achieved, the dividend will remain unchanged at 22 Swiss francs per share.
According to the information provided, the savings program will also be continued. Costs are to be reduced by 100 million in each of the years 2020, 2021 and 2022. (SDA)