Swisscom beats Q2 profit estimates on cost cuts, savings from Italy merger
Swisscom's Second Quarter Performance and Strategic Integration
By Anastasiia Kozlova
Q2 Profit Surpasses Expectations
Aug 6 (Reuters) - Telecoms group Swisscom reported a higher-than-expected second-quarter core profit on Thursday, helped by cost cuts and savings from the integration of Vodafone Italia into its business, sending its shares 4% higher.
Impact of Vodafone Italia Acquisition
Transformation of Italian Operations
Swisscom closed the Vodafone Italia acquisition and merged it with its Italian subsidiary Fastweb in January 2025, transforming Italy from a secondary growth market into a much larger pillar of the group's business alongside its mature home market.
Cost Synergies and Savings Targets
It said the integration work remained on track, generating €166 million in cost synergies in the first half of 2026. The combined Italian business is expected to reach its end-2026 savings target of €300 million by the end of the year.
Financial Results and Analyst Insights
EBITDAaL Performance
The group's lease-adjusted earnings before interest, taxes, depreciation and amortisation, or EBITDAaL, were 1.27 billion Swiss francs ($1.57 billion) in the second quarter, beating market expectations by about 4%, analysts from Vontobel and JPMorgan said.
Analysts' Commentary
Support from Cost Savings
Pulled-forward cost savings in Switzerland and solid realisation of cost synergies in Italy supported the core profit performance, Vontobel analyst Mark Diethelm said in a note.
Outlook and Market Reaction
Full-Year Guidance
The company remains on track to meet its full-year guidance, CEO Christoph Aeschlimann said in a statement.
Share Price Movement
As of 0855 GMT, Swisscom shares were on track for their biggest one-day jump in over two years.
Additional Information
($1 = 0.8085 Swiss francs)
(Reporting by Anastasiia Kozlova in Gdansk, editing by Milla Nissi-Prussak)
