Swisscom posts plunge in net profit, hurt by Fastweb probe

5th May 2010, Comments 0 comments

Swiss telecommunications giant said Wednesday that its net profit for the first quarter plunged by over a fifth, hit by provisions for a tax fraud probe at its Italian subsidiary Fastweb.

Net profit for the first three months of the year fell by 22.1 percent to 377 million francs (263 million euros, 341 million dollars) from 484 million francs a year ago, the group said in a statement.

Net revenues were up 1.3 percent to 2.95 billion francs, thanks to a slight recovery in the economy, it added.

The group's earnings were weighed down by proceedings against Fastweb, for which it had set aside 102 million francs.

Prosecutors in Rome had issued arrest warrants for 56 people, including Fastweb founder Silvio Scaglia, in February over alleged money laundering and tax fraud offences.

Out of a total of two billion euros in value-added tax (VAT) said to have been evaded by the numerous companies being probed, Fastweb is allegedly involved in some 40 million euros in evaded VAT, Swisscom had said.

Swisscom acquired Fastweb in 2007, and it had said that it was aware that Italian investigators were looking into allegations of tax evasion during 2003 and 2006.

© 2010 AFP

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