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Swisscom Q1 Profit Rises; Backs FY Outlook

Swisscom AG (SWZCF.PK,SCMWY.PK) reported that its net income for the first-quarter of 2018 increased 1.6 percent to 379 million Swiss francs, from 373 million francs last year.

The consolidated operating result before depreciation and amortization were 1.058 billion francs down from 1.073 billion francs in the previous year. In the Swiss core business, an adjusted decrease of 2.9% results due to certain effects. Thanks to prudent planning, efficiency improvements and active cost management, Swisscom succeeded in compensating for part of the decline in revenue in the Swiss core business.

Swisscom's consolidated net revenue was up 1.9% on the previous year at 2.885 billion francs, while at constant currencies revenue remained nearly stable (+0.2%). By contrast, Swisscom's revenue in the Swiss core business fell by 1.8% to 2.206 billion francs, mainly as a result of the continuing decline in traditional fixed-line telephony and ongoing price pressure.

In the first three months, headcount in Switzerland fell by 77 full-time equivalents as a result of the declining core business. Swisscom expects that around half of the planned job reduction by the end of the year can be offset by natural fluctuation and vacancy management.

Looking ahead for 2018, Swisscom still 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. If the targets are met, Swisscom will propose to the 2019 Annual General Meeting payment of an unchanged dividend of 22 francs per share for the 2018 financial year.

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