Swisscom raises 2021 earnings guidance as Italy business grows

ZURICH, Aug 5 (Reuters) - Swisscom SCMN.S on Thursday bumped up its profit guidance for 2021 after reporting a 4.9% rise in its half-year earnings before interest, tax, depreciation and amortisation (EBITDA).

The telecoms company now expects EBITDA of 4.4 billion - 4.5 billion Swiss francs for the full-year, an increase of around 100 million francs from its previous forecast, after earnings on the EBITDA level rose to 2.317 billion Swiss francs ($2.55 billion) through June.

Half-year revenues rose 2.6% to 5.583 billion francs, thanks to growth in its Fastweb business in Italy. Swisscom also saw an uptick in smartphones sold and in its IT solutions business for corporate customers in its Swiss home market.

However, ongoing competition and price pressure continued to weigh on its core telecommunications services, while it also pointed to challenges in its plans to expand its mobile network.

"The expansion of mobile communications remains a challenge. While usage by customers continues to rise sharply, expansion is still blocked in many places. There is a risk of data congestion," Chief Executive Urs Schaeppi said in a statement. "With the support of politicians and authorities, we must succeed in increasing the pace of expansion."

Swisscom had already upgraded its 2021 outlook in April, citing ongoing business growth, a weaker Swiss franc against the euro, and a new fibre-optic partnership with peer Salt.

It said on Thursday it planned to propose an unchanged dividend of 22 francs per share at the 2022 annual general meeting if business develops as planned, and kept the remainder of its guidance besides EBITDA unchanged. ($1 = 0.9072 Swiss francs)
Reporting by Brenna Hughes Neghaiwi, editing by John Revill

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