Swisscom says it is “solid as a rock”

Swisscom expects higher earnings this year Keystone Archive

Swisscom, the country's largest telecommunications operator, says its first-half net income of SFr5.36 billion ($3.24 billion) was more than double that of the comparable period last year.

The company said on Thursday that this was mainly due to the sale of a 25 per cent stake in Swisscom Mobile to Vodafone and property divestments.

In a statement, Swisscom said sales revenue was up by 2.8 per cent to SFr7.02 billion. For the full financial year, Swisscom said it expected a slight rise in revenue and “substantially higher” net income than in 2000. It added that the company had exceeded expectations.

“Swisscom has a very solid balance sheet. This is the result of our strong investment principles and a careful selection of opportunities. Swisscom is as solid as a rock,” commented the company’s chairman, Markus Rauh.

The company announced earlier this year that was selectively examining a number of international growth opportunities involving acquisitions in the field of data communication and mobile service providing.

The statement said that if no sizeable transaction were made, it would contemplate a share buy-back programme but as yet, no decisions had been taken.

During the first six months, Swisscom said it had successfully sold a large part of its real estate portfolio, freeing up SFr2.6 billion in cash out of non-core assets.

In other comments, the company said the threat of price cuts, both on fixed and mobile, remained. However, it said Swisscom’s policy would stay unchanged.

“We will not cut prices first, but will follow in a determined way should competition do so,” said Rauh and the company’s CEO, Jens Alder, in their letter to shareholders.

swissinfo with agencies