Swisscom profit plummets 61%

Swisscom’s profit plummeted 61% in 2011, as income was dragged down by Italian subsidiary Fastweb and lower domestic revenues due to termination rate changes and a shift towards bundled services.
The Swiss incumbent’s net fell from 1.7 billion Swiss Francs (€1.4 billion) in 2010 to 694 Francs in 2011 on a 4.3% decline in revenue. The firm reports its sales would have fallen a marginal 1.1% without a one-off impairment charge booked against Fastweb, however the firm also hit problems in its home market, where revenues fell 500 million Francs year-on-year despite growth in subscriber numbers.
While the annual results are gloomy, the billion Franc fall in profit is less than the 1.2 billion decline Swisscom predicted in December. The firm also spent heavily on its domestic broadband infrastructure during the year, resulting in a 17.2% rise in capex to 1.5 billion Francs.
The firm predicts 2012 revenue will be slightly down on 2011, but still in the range of 11.4 billion Francs. EBITDA is forecast to fall from 4.5 billion Francs to 4.4 billion.