Mobilezone lowers forecast for the full year – dividend remains stable
Published: Friday, Dec 13th 2024, 09:10
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The Mobilezone chain of cell phone shops has issued a profit warning, mainly due to poor business in Germany. However, the dividend is to remain stable.
Mobilezone expects sales in 2024 to be lower than in the same period last year. Specifically, sales are expected to be between CHF 960 and 990 million, compared to CHF 1,013 million in the previous year, as the company announced on Friday. Operating profit (EBIT) adjusted for one-off effects will shrink to between 52 and 57 million francs, compared to the previous forecast of 68 to 75 million francs. Last year, Mobilezone achieved an operating profit of 65.7 million Swiss francs.
According to the press release, the reason for lowering the forecasts was that business in Germany remained below expectations. Consumer sentiment there remains pessimistic. As contribution margins in the online business were under pressure, particularly in the second half of the year, Mobilezone also expects profitability there to be "significantly lower than in 2023".
Mobilzone also expects sales in Switzerland to fall by 10 percent in the contract business and 5 percent in the accessories business. However, the previous year was also exceptionally strong, the company said. However, the EBIT margin should increase to around 12.5 percent after 11.7 percent in the previous year.
Several negative one-off effects
In addition, operating profit (EBIT) will be additionally impacted by negative one-off effects amounting to CHF 6.0 million. In addition, there will be a book loss of CHF 2.4 million from the sale of a 25% stake in the German telecoms provider einsAmobile in November 2024, the company added.
In addition, further extraordinary effects in the financial year will lead to adjustments in the order of CHF 17 to 23 million, some of which will be recognized in profit or loss. Of this amount, CHF 15 to 20 million is attributable to write-downs on the IT platforms in Switzerland and Germany and CHF 2 to 3 million to the mobile virtual network operator (MVNO) High. However, Mobilezone pointed out that the figures are only estimates and could still change.
Dividend to remain stable
Despite the lowered expectations, the Board of Directors confirmed its dividend strategy. The Supervisory Board therefore intends to propose an unchanged distribution of CHF 0.90 per registered share at the Annual General Meeting in April 2025.
Markus Bernhard, Executive Delegate of the Board of Directors of Mobilezone, was confident despite the difficult situation in Germany. "The company has a strong, resilient business model and a highly diversified portfolio of products and services over the past few years," he was quoted as saying.
The strong growth in the business as a virtual mobile network operator (MVNO), the stable private customer business and the robust corporate customer business also made him confident about the coming financial years.
EBIT target margin suspended
2025 is set to be a year of transition for the business in Germany. Structural adjustments are also planned. Mobilezone is also suspending the EBIT margin target of 8 percent for 2025 for the entire Group. The 2025 share buyback program is to remain suspended, as in 2024.
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