Swisscom 2010 profit drops, hurt by Fastweb provisions

17th February 2011, Comments 0 comments

Telecoms group Swisscom said Thursday its 2010 net profit fell 7.1 percent to 1.8 billion Swiss francs (1.4 billion euros, $1.9 billion), hurt by provisions set aside for tax fraud proceedings related to its Italian subsidiary Fastweb.

Fastweb and Telecom Italia Sparkle, a subsidiary of rival operator Telecom Italia, have been accused of evading 365 million euros in taxes and laundering illicit money by billing about 2.0 billion euros in telephone services from fake companies between 2003 and 2007.

Both companies have denied any wrongdoing. Swisscom said it had provisioned 102 million francs to deal with related proceedings.

The Swiss telecoms group said meanwhile that overall revenues slipped 0.1 percent to 12 billion francs, impacted by the strong franc.

At constant exchange rates, the group said revenues were up 2.1 percent.

It forecast 2011 sales of at least 11.8 billion francs while noting that there were uncertainties related to currency movements.

Several international Swiss groups have reported an averse impact from the strong franc on their 2010 earnings.

Swisscom said that if it reaches its targets, it will propose a dividend of at least 21 francs per share for the 2011 financial year.

© 2011 AFP

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