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Investing.com -- Swisscom (SIX:SCMN) on Thursday reported a 25.2% drop in first-half net income to CHF 625 million, down from CHF 836 million a year earlier, citing integration costs from its Vodafone (NASDAQ:VOD) Italia acquisition.
The Swiss telecom company also reported higher amortisation, pension costs and interest expenses tied to the deal.
Reported revenue rose 36.7% to CHF 7.45 billion, reflecting Vodafone Italia’s full consolidation.
On a pro forma basis, which treats the acquisition as if it occurred in January 2024, revenue declined 2.3%.
Currency effects from a weaker euro reduced revenue by CHF 66 million. Adjusted for exchange rates, revenue fell 1.4%.
EBITDA after lease expenses (EBITDAaL) dropped 5.5% to CHF 2.47 billion on a pro forma basis. Integration-related charges totaled CHF 19 million, and pension and restructuring costs added CHF 10 million.
Currency effects cut EBITDAaL by CHF 15 million. Adjusted for these, EBITDAaL declined 3.1%.
In Switzerland, revenue dropped 1.9% to CHF 3.90 billion, driven by declines in residential and business customer segments.
Business telecommunications and hardware sales fell, though IT services revenue rose slightly. EBITDAaL decreased by CHF 19 million to CHF 1.68 billion. Operating expenses were cut by 2.6%, and capital expenditure dropped 3.7% to CHF 833 million.
In Italy, revenue dipped 0.4% in euro terms to EUR 3.59 billion. Residential revenue fell 2.6% as telecom services declined.
Business and wholesale revenues increased. Operating expenses rose 2.8%, with direct costs up due to network and IT services spending. EBITDAaL fell 9.8% to EUR 808 million, or 7.6% on an adjusted basis. Capital expenditure declined 10% to EUR 703 million.
Free cash flow rose 40.5% to CHF 496 million, boosted by a CHF 153 million year-over-year improvement in net working capital.
Operating free cash flow increased 1.2% to CHF 989 million. Group capital expenditure declined 7.9% to CHF 1.49 billion.
The company’s headcount fell 3.4% year-over-year to 23,498 full-time equivalents, with job cuts in both Switzerland and Italy. A reduction of 341 positions occurred in the first half of the year.
Swisscom maintained its full-year 2025 guidance, projecting revenue between CHF 15 billion and CHF 15.2 billion, EBITDAaL of about CHF 5 billion, capital expenditures of CHF 3.1 billion to CHF 3.2 billion, and operating free cash flow of CHF 1.8 billion to CHF 1.9 billion.
The company plans to propose a dividend increase to CHF 26 per share at its 2026 annual general meeting.