May 2, 2018 / 5:20 AM / 2 months ago

Swisscom meets Q1 expectations despite difficult market

ZURICH, May 2 (Reuters) - TV, internet and mobile phone services provider Swisscom AG met first-quarter forecasts on Wednesday and retained its annual targets despite what CEO Urs Schaeppi described as a “persistently difficult environment”.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 1.4 percent to 1.058 billion Swiss francs ($1.06 billion) versus the 1.050 billion forecast by analysts polled by Reuters.

Shareholders’ net profit rose 2.1 percent to 381 million francs.

Revenue increased by 1.9 percent to 2.885 billion francs versus the 2.829 billion forecast by analysts, the government-controlled company said.

“The demands of our customers are growing, as is the volume of data on the networks. Consequently, the need for investment remains high,” CEO Schaeppi said.

“At the same time, prices are falling and promotions are intensifying the competition.”

Swisscom has reduced its staff by 4.4 percent in the last year and reduced spending on property, facilities and equipment.

In February it increased its cost-cutting target to fight competition from more agile rivals.

It aims to keep capital expenditure below 2.4 billion this year and reduce costs in Switzerland by 100 million francs a year through 2020, in part by eliminating 700 jobs.

The company kept it guidance for 2018 EBITDA of around 4.2 billion on revenue of around 11.6 billion.

It proposed an unchanged dividend of 22 francs per share, the level it also targets for next year should it hit its goals.

$1 = 0.9955 Swiss francs Reporting by John Revill and Michael Shields; editing by Jason Neely

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