Swisscom Reports Weak Q1 Profit Despite Revenue Growth

Swisscom AG's Q1 report highlights a 19.3% drop in net income, with revenues up 39.3%. Despite weak EPS, EBITDAaL grew significantly. Looking ahead, Swisscom affirms its 2025 outlook and plans an increased dividend.

Date: 08-05-2025

AI Rating: 5

Swisscom AG's recent performance report reveals a mixed picture for professional investors. The company reported a net income decline of 19.3%, dropping from 455 million to 367 million Swiss francs. This significant decrease in profit negatively impacts investor sentiment, particularly in the short term.

**Earnings Per Share (EPS)** showed a notable reduction, with EPS declining to 7.08 francs from 8.78 francs. This decline can raise concerns about profitability and efficiency, which may affect stock prices as investors assess the company's performance and future growth potential.

On a more positive note, **Revenue Growth** demonstrated an impressive increase of 39.3%, rising to 3.76 billion francs. This substantial growth can be attributed to the acquisition of Vodafone Italia, indicating potential for market expansion and increased market share. However, on a pro forma basis, revenue decreased slightly by 1.2%. This inconsistency could cause a mixed reaction among investors.

The **EBITDA after lease expense (EBITDAaL)** also showed promising news, growing by 17.9% to 1.28 billion francs from 1.08 billion francs in the previous year. This metric is crucial as it reflects operational performance, and its positive growth suggests that Swisscom is managing to enhance its earnings capabilities, even in the face of falling net income.

Looking forward, Swisscom maintains a confident outlook for fiscal 2025, expecting constant revenue figures around 15 to 15.2 billion francs, which reflects a stable operational foundation. Investors might take reassurance from the EBITDAaL guidance of around 5.0 billion francs and planned capital expenditures, which signal growth strategies.

Moreover, the announcement of a potential increased dividend payment of 26 francs per share for the 2025 financial year indicates management's confidence in cash flow stability, which could further entice income-focused investors.

Stocks: SWZCF SCMWY