9th November 2021
Daniel Pfund, Senior Financial Analyst
Swisscom announced sales for the first 9 months of 2021 below analysts’ expectations. Nevertheless, operating income (EBIT) and net profit were above expectations thanks to cost reductions of around CHF 99 million in the third quarter.
The traditionally fastest growing division is Fastweb (operations in Italy). But this quarter showed only 1.1% growth in this segment, probably due to a more competitive Italian market with the arrival of Illiad. In Switzerland, Swisscom maintains its strong market share (44%) and the consumer division even grew by 1.0% thanks to better-than-expected hardware sales. On the Internet access side, Swisscom has put its partnership with Salt on hold pending the final decision of the competition commission (comco), which has questioned a technological choice.
The main attraction of the stock remains its stable dividend of 22 francs per share, which represents a yield of 4.4%. This dividend remains financially solid as it only represents a payout ratio of 70%.