Swisscom with declining revenue and earnings
In the first nine months of 2011, Swisscom’s net revenue fell by 4.9 percent to 8,538 million Swiss francs, and operating profit (EBITDA) declined by 0.7 percent to 3,520 million Swiss francs.
The price erosion of CHF 438 million in the Swiss core business could not be offset by customer and volume growth of CHF 343 million, as Swisscom writes in a press release on Wednesday. On a constant currency basis and adjusted for special effects at Fastweb, revenue was down 2.6 percent and EBITDA 3.9 percent on the previous year.
The net revenue of the Italian subsidiary Fastweb fell by 7.8% to EUR 1,295 million in local currency due to aggressive price competition, according to the statement. Swisscom's revenue excluding Fastweb fell by 1.2 percent to CHF 6,946. The 8.4% increase in net profit to CHF 1,528 million is due to a provision recognized in the previous year in the VAT proceedings against Fastweb and income recognized in the third quarter of 2011 that Fastweb will receive as a one-off payment for the settlement of a legal dispute.
The Group's investments rose by 14.8% to CHF 1,465 million, mainly due to increased investments in new generation networks in Switzerland. The 2.7% increase in headcount to 20,032 is attributable to increased customer service, accelerated network expansion and company acquisitions. Around 400 new full-time positions were created in Switzerland. The financial outlook for the 2011 financial year remains unchanged. Swisscom continues to expect a dividend payout of at least CHF 21 per share for 2011.
