Fastweb sparkles in Swisscom Q2
Swisscom is not in the habit of throwing curveballs at investors in its quarterly results, and the steady improvement theme was once again on display through Q2, which ended June 30.
On its home turf in Switzerland, financial metrics and subscription figures were stable, but it was strong turnover growth and an uptick in operating income before depreciation and amortisation (EBITDA) at Italian subsidiary Fastweb that really caught the eye.
Group Q2 and H1 performances were strong enough for Swisscom to raise its full-year EBITDA outlook, creating what might tentatively be described as a feel-good factor.
Italy outshines Switzerland
Group level Q2 net revenue, at CHF 2.78 billion ($3.1 billion), was up 2.7% year-on-year. Nearly all of the rise was attributable to Fastweb, however. In Switzerland, net customer adds in TV and broadband remained stable, although there was stronger growth in post-paid mobile subscriptions.
When combined with a 2.4% decline in sales from business customers, however – the pandemic, said Swisscom, is still a headwind – it amounted to negligible top-line growth at Swisscom Switzerland. At a shade over CHF 2 billion ($2.2 billion), Q2 revenue was up a meagre 0.2% compared with the same quarter last year.
It’s a different story in Italy. Buoyed by increasing popularity of its post-paid mobile subscriptions and bundled packages, Fastweb’s net revenue bounded forward by 10%, to CHF 659 million ($727 million).
Net income for the group jumped 19.3%, to CHF 408 million ($450 million), over the same period (although capex was down CHF 16 million ($18 million) compared with Q2 2020, to CHF 543 million/$589 million). Group EBITDA, at CHF 1.19 billion ($1.139 billion), was up 8.8% compared with the same quarter last year.
Looking through the lens of H1 results, EBITDA climbed 4.9% year-on-year, to CHF 2.32 billion ($2.6 billion). Fastweb was (again) the main H1 growth driver here, up 8% year‑on‑year to CHF 420 million ($463 million).
On the back of these results, Swisscom upped its full-year EBITDA guidance from between CHF 4.3 billion ($4.7 billion) and CHF 4.4 billion ($4.9 billion) to between CHF 4.4 billion and CHF 4.5 billion ($5 billion). The financial outlook for FY 2021 remains unchanged in terms of net revenue (CHF 11.3 billion/$12.5 billion) and capital expenditure (CHF 2.2 billion/$2.4 billion).
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— Ken Wieland, contributing editor, special to Light Reading