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August 11, 2009

Swisscom H1 profit up 20.7% to CHF1 billion

Swiss revenue drops, warns of price erosion

By CBR Staff Writer

Swisscom has reported an increase of 20.7% in its profit for the first half of 2009. The increase was due to a combination of lower net financial expenses, a reduction in depreciation and exceptional items relating to the termination of long-term lease agreements in the previous year.

The company has posted a net income of CHF1.02 billion in the first half of 2009, compared to CHF846m in the same half of 2008.

Net revenue for the first half ended June 30, 2009, was CHF5.91 billion, down 1.2%, compared to net revenue of CHF5.99 billion in the first half of 2008. The operating free cash flow was CHF1.35 billion, which is largely on par with the prior-year level.

For the second quarter of 2009, the company reported a 28.6% increase in its net profit to CHF530m, compared with CHF412m for the second quarter of 2008. Earnings per share rose to CHF10.23 from CHF7.93.

Net revenue of the group’s Italian subsidiary Fastweb increased by 12.9% in local currency terms, compared to the first half of 2008. The Swiss revenue dropped due to continuing price erosion of around CHF200m. which could not be offset by customer growth and new offerings. The net fall in Switzerland was around CHF150m.

Swisscom’s Bluewin TV customers more than doubled in number year-on-year, reaching 165,000 at the end of the second quarter of 2009. The number of mobile subscribers in Switzerland increased year-on-year by a net of 297,000 to 5.48 million.

Excluding Fastweb, Swisscom expects to close the 2009 financial year with revenue between CHF9.2 billion and CHF9.3 billion. Fastweb is expected to close with revenue of around €1.8 billion.

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