Sunrise bullish on full year earnings despite mixed Q2

Olaf Swantee, Sunrise CEO

Sunrise stood by its full-year earnings forecasts despite reporting annual declines in EBITDA, revenue, and net income during the second quarter of 2016.

The Swiss operator generated a net profit of CHF10 million (€9.1 million/$10.3 million) during the second quarter compared to CHF14 million in the comparable period of 2015. Total revenue fell 3.2 per cent year-on-year to CHF472 million, while EBITDA declined 3.5 per cent to CHF148 million.

Despite the declines, Sunrise remained confident it would achieve its full-year earnings targets, which include revenue in the range of CHF1.8 billion to CHF1.9 billion, adjusted EBITDA of between CHF600 million and CHF620 million, and capex of CHF220 million and CHF230 million.

CEO Olaf Swantee explained that the company’s performance in the second quarter was better than the headline figures suggest. He noted that the rate of decline in revenue “halved compared to Q1” and that the operator “invested in an improved network, customer service, and in innovative convergent products” during the second quarter.

The CEO said the company will continue to seek out further improvements in those three areas, as it seeks to “strengthen our position as the leading challenger.”

Sunrise added 21,700 postpaid mobile subscribers during the second quarter, taking its total mobile user base to 1.4 million at end-June. The operator said that its prepaid mobile subscriber base continued to decline during the quarter, but noted that the rate of decline was lower than in the first three months of 2016 and that many of the prepaid users had been converted to contract users.

The operator added 9,000 Internet subscribers during the second quarter, which it said was its strongest rate of quarterly net additions in the sector for five years. Total Internet subscribers hit 357,500 by the end of the quarter, it said.

Sunrise also revealed that it overturned a net loss in the first half of 2015 with a profit of CHF17 million in the opening six months of 2016. Revenue fell 6 per cent year-on-year to CHF917 million in H1 2016, while EBITDA increased by a marginal 0.3 per cent to CHF287 million.

For more:
- see this Sunrise announcement (PDF)
- view the operator’s full earnings statement (PDF)

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