August 20, 2014 / 6:15 AM / 3 years ago

UPDATE 1-Swisscom raises full-year profit guidance on growing customer demand

* Q2 core profit 1.12 bln Sfr vs 1.09 bln expected

* Net revenue 2.88 bln vs 2.89 bln in poll

* Raises guidance, now expects FY EBITDA of 4.4 bln Sfr (Adds details, background)

ZURICH, Aug 20 (Reuters) - Telecoms group Swisscom nudged up its forecast for full-year core profit on Wednesday, after growing customer demand offset falling prices and helped it post better-than-expected earnings in the second quarter.

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

Swisscom is hoping those investments will start to pay off this year. At the end of June, around 1.9 million customers were using its Infinity offering, including unlimited calls, text and internet surfing, compared with 1.3 million a year earlier.

The group now expects earnings before interest, tax, depreciation and amortisation (EBITDA) in excess of 4.4 billion Swiss francs ($4.8 billion), compared with a previous forecast for 4.35 billion.

It also confirmed its expectation for sales to rise to 11.5 billion francs and said it would propose a stable dividend of 22 francs per share for the 2014 financial year.

This positive outlook contrasts with many other European telecoms groups, which are still grappling with falling sales and profits. Last week, Telekom Austria trimmed its full-year guidance, while Belgacom is forecasting a drop in core profit for this year.

Swisscom said EBITDA for the second quarter came in at 1.12 billion francs, slightly ahead of the average forecast in a Reuters poll of 1.09 billion.

Net revenue rose to 2.88 billion francs from 2.86 billion. Swisscom said it had added 77,000 new customers for its upgraded TV services, Swisscom TV 2.0, launched at the start of April.

Shares in Swisscom, up 11 percent so far this year, trade at 16.7 times forecast earnings, a discount to Telekom Austria’s 19.6 times but above Belgacom’s 15.3 times, Reuters data show. (1 US dollar = 0.9098 Swiss franc) (Reporting by Caroline Copley; Editing by David Holmes)

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