Switzerland's leading telecommunications company, Swisscom, has reported a 2007 net profit of SFr 2.07 billion ($1.99 billion), up 29 per cent over the previous year.
Swisscom said on Wednesday that net income had been boosted by the repurchase of the 25 per cent Vodafone stake in its mobile phone unit and the sale of its Hungarian unit, Antenna Hungaria.
Sales were up by almost 15 per cent to SFr11.1 billion, the company said in a statement. These were driven by Swisscom's €3 billion acquisition of Italian broadband operator Fastweb.
Analysts had on average forecast a net profit of SFr2.02 billion and sales of SFr11.2 billion.
Swiss bought Fastweb last year, returning to a more aggressive strategy to counter lacklustre growth at home, where it faces price pressures and increasing competition from others.
The deal represented the first major foreign acquisition since the Swiss government, Swisscom's majority stakeholder, overruled its previous expansionist strategy.
A cabinet ban on Swisscom buying foreign companies, which came with statutory service commitments, scuppered the proposed takeovers of Ireland's Eircom and Telekom Austria in November 2005 and led to the resignation of chief executive Jens Alder two months later.
"The company is well positioned and the Fastweb acquisition will really pay off in 2008," commented analyst Frank Rothauge at Bank Sal. Oppenheim.
Swisscom's operating income before interest, taxes, depreciation and amortisation rose 19 per cent to SFr4.5 billion, although it was only 1.7 higher in its core business in Switzerland.
Lower prices and volumes were more than outweighed by new customers and offers such as new data services as well as cost reductions, Swisscom said in a statement.
A note from analysts at Helvea described the results as "no real surprise but a relief" and added that the figures showed stability in Swisscom's core business.
The state-controlled company proposed an increase in ordinary dividend to SFr18 from SFr17 and a special dividend of SFr2 per share, adding that no share buyback was planned for 2008.
In its financial outlook for this year, Swisscom said customers would continue to benefit from "dynamic competition" this year. It expects sales of about SFr12.3 billion and operating income of around SFr4.8 billion.
Swisscom shares have lost more than 13 per cent so far this year, after falling about four per cent in 2007.
swissinfo with agencies
Swisscom 2007 figures
Sales: SFr11.089 billion (+14.9% over 2006)
Earnings before interest, taxes, depreciation and amortisation, Ebitda: SFrSFr4.501 (+18.9%)
Earnings before interest and taxes, Ebit: SFr2.515 billion (+7%)
Net profit: SFr2.068 billion (+29.4%)
Number of employees: 19,844 (+16.3%)
The Swiss government has a 52% stake in the company.
The Milan-based broadband company last week announced that its 2007 loss had increased by 0.9% to €124.7 million, due to higher tax charges.
However, Italy's second-largest telecoms operator by market value said it expected to reach its first net profit in 2008.
Fastweb has been aggressively competing with former monopoly Telecom Italia. The Swisscom-controlled company has completed network expansion to cover 50% of the Italian market so far.
Swisscom is launching a new brand over the coming weeks to be used in place of the previous Swisscom sub-brands (Fixnet, Mobile and Solutions). It will also replace Bluewin, the largest online portal in Switzerland.
A redesigned logo with a moving picture element is also a part of the new identity.
It will gradually be implemented on vehicles, shops, buildings, the website and elsewhere.
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