Zurich (awp) – Investors withdrew from Swisscom on Thursday morning, the title of the Swiss telecoms number one finding itself under pressure, despite a solid quarterly performance. If the blue giant posted an increase in net profit between January and the end of March, its revenues contracted under the effect in particular of a fiercely contested Swiss market and the strength of the franc.
While pre-market data suggested a rising opening, the trend reversed at the start of the session, with registered Swisscom then losing 1.7%. And the fall was amplified in the first exchanges, the stock tumbling around 10:00 a.m. by 2.6% to 490.60 Swiss francs. The flagship SMI index increased by 0.17%.
Analysts generally agree that the operator has had a good start to the year, even if turnover was somewhat lower than expected. A phenomenon that experts attribute to fierce competition on the Swiss market, while the strength of the franc against the euro has undermined the solid performance of the transalpine subsidiary Fastweb. The latter showed a better result than expected.
Even if the contribution of the Italian subsidiary to the group’s profitability remains modest, the relevant indicators, Ebit and Ebitda, have exceeded all expectations. A pleasant surprise that experts attribute to the progress made in cost management.
UBS, for its part, is observing contradictory movements among investors, with those based abroad still showing more reservations than their Swiss counterparts regarding the recent takeover of the mobile activities of the British Vodafone in Italy.
Despite the good start, Swisscom is sticking to its financial objectives for the entire current financial year, revealed at the beginning of February, even though analysts had judged them to be a little too cautious.
On the side of the British bank Barclays, the efforts of discipline in terms of costs and the contribution of Fastweb are highlighted. However, the evolution of turnover clearly reveals the intensity of competition. And this, not only in the commercial client sector, but also in that of private clients.
A shared opinion at Vontobel, the Zurich management bank attributing the increase in profit to unique factors.
vj/al
