Swisscom Boosts Q1 Profit

BERN, Switzerland -- In the first quarter of 2004 the Swisscom Group posted a sound result. Excluding debitel, revenue rose by 1.2% to CHF 2.49 billion. Operating income before interest, taxes, depreciation and amortization (EBITDA, excluding debitel) fell year-on-year by 1.3% to CHF 1.13 billion, while net income rose by 19.3% to CHF 488 million. Without the debitel Group and in the face of continuing strong competition and unchanged regulatory conditions, Swisscom expects to close the current financial year with a consolidated revenue of around CHF 10 billion and operating income before interest, taxes, depreciation and amortization (EBITDA) of approximately CHF 4.3 billion.

Following conclusion of the sales agreement at the end of April 2004, the holding in debitel is recorded in the Swisscom consolidated financial statements as a discontinued operation and disclosed separately in the consolidated income statement, balance sheet and cash flow statement.

Revenue from fixed network and mobile activities rose by 1.2% and 7.1% respectively in the first quarter of 2004. Swisscom's core business was positively impacted by the ongoing boom in broadband ADSL access coupled with a further rise in the number of mobile customers.

The Swisscom Group reduced depreciation and amortization year-on-year by CHF 38 million, largely due to lower amortization at Fixnet as a result of the increased number of fully amortized installations. Financial expense halved to CHF 42 million compared with the previous year due to lower interest rates and lower impairment charges.

At the end of April 2004 Swisscom agreed to sell its holding in debitel to an international investor. debitel is therefore included in the financial statements as a discontinued operation. The result for debitel for the first three months of 2004 was a loss of CHF 15 million (compared to minus CHF 37 million in the previous-year period). This figure includes goodwill amortization amounting to CHF 32 million (previous-year period CHF 41 million).

The improvement of 19.3% or CHF 79 million in the Swisscom Group's net income is primarily attributable to higher operating income (EBIT) and a reduction in financial expense. Earnings per share amount to CHF 7.37 (2003: CHF 6.18).

As previously announced, Swisscom will buy back CHF 2 billion worth of its own shares via the second trading line. The share buy-back programme is expected to be launched on May 24. The repurchased shares are for a capital reduction planned for the 2005 General Meeting.

Without the debitel Group and in the face of continuing strong competition and unchanged regulatory conditions, Swisscom expects to close the current financial year with a consolidated revenue of around CHF 10 billion and operating income before interest, tax, depreciation and amortization (EBITDA) of approximately CHF 4.3 billion. Capital expenditure in 2004 will be in the order of CHF 1.3 billion.

Swisscom AG