Swisscom Q1 beats estimation while revenues drop

Swisscom reports revenues of CHF 2.83 billion for the first quarter of this year, down by 1.9 percent compared with the same period in 2016. The revenue decrease is caused by strong pressure on prices and increasing market saturation. In Q1 Swisscom revenue from telecommunications services fell by CHF 37 million (-2.2%). Around 50 percent of this decrease in revenue was the result of a decline in subscribers in fixed-line telephony, while the other 50 percent was due to price reductions, including roaming, and a decline in corporate business. 

Due to its continued active cost management, Swisscom was able to curb the decline of its EBITDA to -0.7 percent year-on-year to CHF 1.073 billion for the first quarter, while the EBIT grew by 2.8 percent to CHF 550 million. This led to a 2.5 percent growth in net profit to CHF 373 million for the first quarter. The company cut its Swiss headcount by 680 employees to 18,280 from the previous year as its core business declined.

"We earned a solid result in the first quarter, and we did this under continuing heavy pressure and in a difficult environment," Chief Executive Urs Schaeppi said.

He said the firm aims to offset price pressure in the remaining months of 2017 with promotions including "inOne" bundled products that he expects to boost sales.

Swisscom left its outlook unchanged for 2017, when it still expects net revenue of around 11.6 billion francs and an operating profit of around 4.2 billion francs.

If the targets are met, Swisscom will propose to the 2018 Annual General Meeting payment of an unchanged dividend of CHF 22 per share for the 2017 financial year.