Mobilezone hopes for a boost from the new iPhone after a slow half-year
Published: Friday, Aug 16th 2024, 12:50
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After the downturn in the previous year, cell phone provider Mobilezone has recovered. Sales increased slightly in the first half of the year, while operating profit remained stable. Group management is hoping for a boost from the new iPhone, which should attract more customers back into the stores.
By the middle of the year, sales had risen by 1.1 percent to CHF 479.5 million, as Mobilezone announced in a press release on Friday. However, currency developments had a negative impact on the result. Adjusted for currency effects, sales would have grown by 3.0 percent.
Operating profit (EBIT) remained unchanged at CHF 28.1 million. At the bottom line, Mobilezone achieved a net profit of 20.3 million francs. This is 2.9 percent less than a year ago.
Expectations missed
The Group's figures fell short of analysts' expectations, who on average had expected higher sales and profits. The share price fell by around 3% by midday, while the market as a whole rose slightly.
The slightly lowered outlook was not well received by investors: The company is on track and can confirm the EBIT target of CHF 68 and 75 million, he said. However, operating profit is now likely to land at the lower end of this range, explained Markus Bernhard, Delegate of the Board of Directors. In the previous year, Mobilezone achieved an EBIT of CHF 65.7 million.
Sales should reach CHF 1 billion or more by the end of the year, Bernhard, who handed over his position as Group CEO to Switzerland CEO Roger Wassmer and Germany CEO Wilke Stroman at the end of June, said in a conference call. Mobilezone generated sales of 1.01 billion Swiss francs in 2023.
More cell phone subscribers expected
In addition to the boost from the new iPhone, the Group expects further growth in its business as a virtual mobile network operator (MVNO) with the Talktalk, Digital Republic and HIGH brands: strong growth to over 370,000 customers by the end of 2024 (31.12.2023: 295,300) is planned, it said. In addition, the operating profit (EBITDA) of the MVNO business is expected to increase.
In the first half of the year, the company suffered a decline in customer numbers in its own stores in Switzerland. This put pressure on sales in the contract and accessories business. However, Mobilezone is not alone in this. It was the same for the competition, explained Wassmer, Head of Switzerland: "However, we are confident that this will change again in the coming months."
Sales in Switzerland fell by 10.6% to CHF 135 million in the first half of the year. However, operating profit EBIT remained stable at 15.1 million.
"In Germany, sales figures increased in the first half of the year despite a persistently challenging market environment," said Mobilezone. Sales climbed by 9.3 percent to 363 million euros (+6.1 percent in Swiss francs). EBIT rose slightly to 13.5 million euros after 13.3 million in the previous year. In the reporting currency of Swiss francs, however, it fell by 0.2 million to 13.0 million francs.
Sticking to the medium-term goal
The company also reaffirmed its target of increasing the EBIT margin to 8.0% by 2025 from 6.5% in 2023. "We always achieve a better margin in the second half of the year than in the first," said Bernhard. In addition, the effects of the cost-cutting program launched last year are becoming more noticeable.
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