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Swisscom trims 2020 sales guidance, plays down…

ZURICH, Aug 13 – Swisscom trimmed its 2020 revenue forecast on Thursday as COVID-19 weighs on income from roaming charges and said it was ready to take on the rival set to be formed by Liberty Global’s planned takeover of Sunrise Communications.

State-controlled Swisscom, the country’s dominant telecoms player, still expects earnings before interest, tax, depreciation and amortisation (EBITDA) of around 4.3 billion Swiss francs ($4.72 billion) and capital expenditure of around 2.3 billion this year, it said.

“Mainly as a result of COVID-19, Swisscom expects net revenue to be slightly lower at around 11.0 billion (previously around 11.1 billion) francs due to the reduction in roaming volume,” it said.

“If business continues as planned, Swisscom intends to propose to the 2021 annual general meeting payment of an unchanged dividend of 22 francs per share for the 2020 financial year.”

Chief Executive Urs Schaeppi said Swisscom was “very well placed” to handle sector consolidation in Switzerland after news on Wednesday that Liberty Global plans to buy Sunrise Communications in a $7.4 billion deal.

“Competition will stay hard, it will be driven by innovation. Prices will certainly not rise,” he told reporters.

Zuercher Kantonalbank analyst Andreas Mueller, who rates the stock “overweight”, said Swisscom might actually benefit from the Liberty-Sunrise deal in the short term.

“We see a window during the integration phase in which Swisscom can gain customers again,” he wrote in a note to clients.

Swisscom shares were little changed in early trading.

First-half group revenue of 5.44 billion francs was down 2.7% after currency adjustments. In its saturated Swiss core business, revenue fell 3.9% to 4.10 billion.

Group EBITDA slipped 1.4% to 2.21 billion francs. EBITDA fell by 1.2% in the core Swiss business, while that of Italian business Fastweb increased by 4.6% as its revenue grew 5.3%.

($1 = 0.9101 Swiss francs) (Reporting by Michael Shields, editing by John Revill)

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