Swisscom Says Franc Rise to Cut Sales by $434 Million on FastwebCornelius Rahn
Swisscom AG, Switzerland’s largest phone company, forecast 2015 earnings trailing analysts’ estimates as a surge of the Swiss franc reduces revenue and profit coming from its Italian Fastweb SpA unit.
The franc’s jump will cut sales by 400 million francs ($434 million) and earnings before interest, taxes, depreciation and amortization by 100 million francs, assumed parity between the euro and franc, the Bern-based company said in a statement today. That doesn’t include a potential hit the Swiss economy may take from the appreciation of its currency, Swisscom said.
The Swiss National Bank last month eliminated a cap on the franc-to-euro rate, leading to a jump of as much as 41 percent in the currency’s value. A few days later, the European Central Bank announced additional stimulus measures, further putting pressure on the European currency. Lower projected earnings from Fastweb may make it more acceptable for Swisscom to sell the unit, which has been an target of Vodafone Group Plc.
Swisscom’s Chief Executive Officer Urs Schaeppi said in December, before the SNB decision, that he would consider selling Fastweb if he received a “fantastic” offer, adding that “we are a happy owner of Fastweb.”
Fastweb, with more than 2 million broadband lines at the end of the year, accounts for about 17 percent of Swisscom’s revenue.
Shares of Swisscom fell 2.2 percent to 533.50 francs at 9:05 a.m. in Zurich.
Full-year Ebitda will be about 4.2 billion francs, Swisscom said. Analysts estimated 4.42 billion francs, the average of estimates compiled by Bloomberg.
The cheaper euro also has a positive side for Swisscom. Investments in its infrastructure will be 100 million francs lower than last year, helped by reduced costs of building out its Italian network.
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