UPDATE 1-Swisscom signals moderate sales and profit growth for 2014

Thu Feb 6, 2014 2:50am EST

* Core profit and sales seen inching higher in 2014

* 2013 sales 11.43 bln Sfr vs 11.44 f'cast in poll

* Core profit of 4.3 bln Sfr, down 3.9 pct

* Proposes dividend of 22 Sfr per share (Adds detail, background)

ZURICH, Feb 6 (Reuters) - Telecoms group Swisscom flagged moderate growth in core profit and sales this year as rising demand from customers offsets continued high capital spending on its network.

Switzerland's national telecoms operator said on Thursday it expected earnings before interest, tax, depreciation and amortisation (EBITDA) to tick up to 4.35 billion Swiss francs ($4.8 billion) in 2014, with sales rising to 11.5 billion.

Sales for last year rose 0.4 percent to 11.43 billion francs, in line with the average analyst forecast in a Reuters poll.

But EBITDA fell 3.9 percent to 4.3 billion francs, hit by a fall in revenue in the firm's core Swiss business due to falling prices and reduced roaming costs, as well as higher expenses for network maintenance and IT.

The company, which is majority owned by the state, has invested heavily in a high-speed broadband network to cater for the growing usage of smartphones and tablets, betting that consumers will pay a premium for fast data.

Swisscom said those investments had started to pay off. At the end of 2013, around 1.7 million customers or half its subscriber customers were using its Infinity offering, which includes unlimited calls, text and mobile data.

Urs Schaeppi, who took over as chief executive in November following the suicide of Carsten Schloter, said Swisscom had added 61,000 new mobile customers and 57,000 new television service customers in the fourth quarter.

At its Italian broadband network operator Fastweb, where it has pioneered the roll-out of fibre in Italy, the number of broadband access lines was up by 31,000 in the final three months of the year.

Swisscom expects capital spending of 2.4 billion francs this year, at a similar level to last year.

Despite the fall in profits, Swisscom plans to pay a dividend of 22 francs per share for the 2013 financial year, unchanged from the previous year. It expects to propose the same dividend for 2014 if it meets its targets.

Shares in Swisscom, which have risen 27 percent since the end of June, trade at 15.5 times forward earnings, at a discount to Telekom Austria's 20.9 times, but at a premium to Belgacom's 12.5 times.

($1 = 0.9033 Swiss francs) (Reporting by Caroline Copley; Editing by Mark Potter)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.