Swisscom boosts profit – no acquisition yet

Swisscom has cash and little debt Keystone

Switzerland’s largest telecommunications group, Swisscom, has reported that its net profit for the first half jumped by 22.1 per cent to SFr952 million ($684.77 million)

Swisscom, which is majority owned by the Swiss confederation, had net revenue of SFr7,154 billion or 0.4 per cent higher than during the comparable period last year.

A statement on Wednesday from the company’s headquarters in Bern said that declining revenue in Switzerland had been offset by revenue growth with lower margins at its German mobile subsidiary debitel.

Swisscom is one of the few European telecoms groups to emerge unscathed from the sector’s cash problems and has a net debt of “only” SFr125 million.

Acquisitions?

However, with competition rising in the domestic market, Swisscom has been looking to make acquisitions with the cash it has in hand.

One widely tipped target has been Telekom Austria but company chief executive Jens Alder has said no concrete talks have begun.

“We are not holding any negotiations at present. We have quite obviously been in contact for some time but we have decided not to make an offer for the Austrian operator,” he commented.

“The acquisition of other targets is being studied but I cannot give you names,” he added.

Swisscom said that in view of the tight market situation, the group anticipated a slight overall decline in revenue for the current year.

But it commented that thanks to consistent cost management, operating income before interest, taxes, depreciation and amortisation was expected to remain at least the same as in 2002 (SFr4.4 billion).

Ciba income dips

In other business news, Ciba Specialty Chemicals announced its first-half net profit dropped by 14 per cent in the first six months to SFr193 million.

Sales were down eight per cent at SFr3.379 billion, hit by the strength of the Swiss franc and the euro.

However, the company said in a statement from its Basel headquarters that it had increased sales, operating income and earnings before interest, tax, depreciation and amortisation (EBITDA) by two per cent in local currencies.

It added that the second half of 2003 was proving to be more difficult than expected at the beginning of the year, with no clear signs of an economic recovery.

The statement said that Ciba was taking “firm steps” in the “difficult environment” to reach net income of around last year’s level (SFr406 million).

Ciba said it planned to buy back and cancel up to ten per cent of its shares but reserved the right to use them for acquisitions.

swissinfo with agencies

In brief

Swisscom has announced a first-half net profit of SFrSFR952, up by 22.1 per cent over the comparable period last year.

Ciba Specialty Chemicals of Basel saw net income fall by 14 per cent to SFr193 million.