Vodafone raises outlook after a strong H1
Tuesday, November 08 08:41:10
Vodafone has edged its full-year outlook higher this morning as growth in emerging markets and robust trading in northern Europe helped the world’s largest mobile operator to post first-half results ahead of forecasts.
The results were boosted by strong growth in India and robust performances in Germany and Britain.
Growth in Turkey slowed but remained solid.
However the group showed that it was still facing tough conditions in Italy, where organic service revenue fell 3 pc in the second quarter from down 1.5 pc in the first, and Spain, where it has struggled in a weak economy for several years.
Service revenue was slightly improved in Spain but it was still down 9.3 pc in the second quarter from down 9.9 pc in the first.
The company took an impairment loss of GBP 450m in relation to Vodafone Greece.
It has moved its outlook for full-year adjusted operating profit to the top end of its range, predicting profits of between GBP 11.4 – 11.8bn compared with an earlier forecast of GBP 11 – 11.8bn pounds.
“They’re really great numbers,” analyst Will Draper at Espirito Santo told Reuters. “Revenues are up 1 pc on the consensus and they’ve raised the operating guidance towards the top end of the range. So I think they’re pretty bullet proof.
“Overall I would mention the organic service revenue growth at 1.3 pc which was a long way better than consensus at 1.1 pc and within that the really encouraging thing was Europe which was only down 1.2 pc, compared to the forecast of minus 1.7″.
The group posted first-half revenue up 4.1 pc to GBP 23.5bn and core earnings up 2.3pc to GBP 7.5bn.
Analysts had been expecting group revenue at GBP 23.4bn and earnings at GBP 7.4bn.
On the key industry metric of group organic service revenue, which relates to the provision of ongoing services, the group was up 1.4pc in the first half and up 1.3 pc in the second quarter.
It had been up 1.5 pc in the first quarter and analysts were expecting growth of 1.1 pc.