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Swisscom FY17 Profit Down

Swiss telecommunication services firm Swisscom AG (SWZCF.PK,SCMWY.PK) reported that its net income for fiscal year 2017 declined 2.2% to 1.568 billion Swiss francs from the previous year.

Swisscom's consolidated operating income before depreciation and amortisation or EBITDA was similarly stable at 4.295 billion francs. It included a burden on income for restructuring and one-off income from legal disputes at Fastweb.

After adjustment, EBITDA fell slightly by 0.5%. The Swiss core business was down 2.4%, due to the decline in fixed-line telephony connections, pressure on pricing, increased inclusion of roaming in the basic charge and low subscription growth in a saturated market. EBITDA was positively affected, however, by cost savings and growth at Fastweb.

Swisscom's consolidated net revenue was 11.662 billion francs, up 0.2% from the previous year. In the Swiss core business, Swisscom's revenue sank by 2.1% to 9.058 billion francs, primarily as a result of falling revenue with fixed-line telephony and lower income from roaming services.

Swisscom expects net revenue of around 11.6 billion francs, EBITDA of around 4.2 billion francs and capital expenditure of less than 2.4 billion francs for 2018.

Subject to achieving its targets, Swisscom will propose payment of an unchanged dividend of 22 francs per share for financial year 2018 at the 2019 Annual General Meeting.

In February 2016, Swisscom announced that it would be cutting its annual cost base in Switzerland by around 60 million francs per year by 2020. In view of the persistent market pressure in its core business, Swisscom is raising this target to 100 million francs per year between the years 2018 and 2020. Swisscom continues to cut costs mainly by simplifying workflows and reducing the number of positions in declining divisions. In contrast, new positions are to be created in growth areas such as the cloud and security.

By the end of 2018, Swisscom expects to have a headcount of around 17,000 FTEs in Switzerland, around 700 fewer than at the end of 2017. This includes, as already announced, the reduction in headcount at Billag Ltd of around 100 jobs.

The Chairman and members of the Board of Directors will be standing for re-election. With one exception: Theophil Schlatter will be stepping down from the Board of Directors at the Annual General Meeting. The certified public account is currently Vice-Chairman of the Board of Directors. The Board of Directors sincerely thanks Theophil Schlatter for his many years of service to Swisscom.

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