Swisscom 1Q Profit Drops 3.8%; Confirms Full-Year Outlook

Swisscom AG (SCMN.VX) Wednesday reported a 3.8% decline in first-quarter net income, and confirmed its financial outlook for the full year.

MAIN FACTS:

- Net revenue dropped 2.1% to CHF2.082 billion and operating income (EBITDA) fell 2.0% to CHF1.10 billion.

- On a like-for-like basis and at constant exchange rates revenue was 0.8% lower and EBITDA 0.9% higher.

- The 3.8% fall in net income to CHF456 million is primarily attributable to lower operating income before depreciation and amortisation (EBITDA).

- Excluding revenue from hubbing, Fastweb reported stable net revenue in local currency year-on-year and reduced low-margin hubbing revenue as planned by EUR12 million.

- Swisscom's net revenue without Fastweb contracted 0.4%, or CHF9 million, to CHF2.29 billion.

- Assuming an average CHF/EUR exchange rate of 1.23, Swisscom expects to close the year with net revenue of CHF11.4 billion and EBITDA of CHF4.4 billion.

- Excluding low-margin wholesale business (hubbing), Fastweb expects revenue to remain stable at EUR1.6 billion, and Fastweb is expected to close 2012 with slightly higher EBITDA and slightly lower capital expenditure compared to 2011.

- Capital expenditure at Swisscom, excluding expenditure on mobile frequencies of CHF360 million, will total up to CHF2.2 billion. Of this, CHF 1.7 billion will be invested in Swiss business, an increase of CHF100 million. A similarly high level of investment is projected for the following years.

- If all 2012 targets are met, Swisscom will again propose a dividend of CHF22 per share at the 2013 Annual General Meeting.

-Zurich Bureau, Dow Jones Newswires, [phone]; [e-mail]