Sunrise with lower sales and operating profit in the summer quarter
Published: Wednesday, Nov 1st 2023, 07:40
Updated At: Thursday, Nov 2nd 2023, 00:54
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The decline at Sunrise continues. Switzerland's second-largest telecoms group also reported slightly lower revenue and earnings in the summer quarter.
Sales shrank 0.8 percent on an adjusted basis to CHF 759.1 million, Sunrise announced in a communiqué on Wednesday. This decline was due to the residential mobile division (-2.3 percent), the company said. There were lower sales of cell phones and tablets, roaming and value-added services. In contrast, Sunrise was able to sell more mobile subscriptions.
In the fixed-network business for residential customers, the year-on-year decline in revenue (-0.6 percent) was significantly lower than in the previous quarter. The price increase from July 1 and the fading effect of the price alignment from the merger of the Sunrise and UPC brands in the fixed network had an impact here. The corporate customer business remained stable.
Less aggressive special offers
Segment-adjusted operating profit before depreciation and amortization (EBITDA) decreased by 3.4 percent to CHF 274.9 million. The main reason for the decline was higher hardware and fixed-network access costs. "These were partially offset by somewhat lower operating costs, although higher costs for network maintenance and energy were also incurred here," Sunrise wrote.
"After the price increase due to inflation and with a focus on maintaining value in the customer base, we held back on aggressive promotions," explained Group CEO André Krause. Nevertheless, Sunrise had gained 29,200 new cell phone subscribers. The second brands Yallo, Lebara and Swype also contributed strongly to growth.
In the first nine months as a whole, revenue decreased by 1.2 percent to CHF 2.2 billion. There was a decline in mobile communications and in the fixed network for residential customers. By contrast, the corporate customer business increased. Segment-adjusted EBITDA fell by 4.3 percent to CHF 776.2 million.
Headwind from summer quarter drops away
"Compared to the first half of the year, we again see an improvement in financial trends and remain on track after nine months. Looking ahead, we expect much stronger momentum in the fourth quarter as the headwinds from the third quarter disappear," Krause explained.
Therefore, Sunrise confirms the financial targets for the full year 2023. The Group continues to expect a revenue decline in the low single-digit percentage range. Segment-adjusted EBITDA is expected to decline in the low to mid single-digit range. And adjusted free cash flow is expected to be between CHF 320 million and CHF 350 million.
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