Vodafone lifts profits on global sales increases
Vodafone has lifted it’s profit outlook as global sales have increased- in particular in emerging markets and UK demand.
The mobile operator reported pre-tax profits for six months to September of £8 billion ($13 billion) slightly down from £8.2 billion in the same period last year.
Vodafone however increased its full year operating profit forecast to £11.4 billion-£11.8 billion from £11 billion- £11.8 billion previously.
The firm was hurt by eurozone problems, including a £450m write off of the value of their Greek business.
Vodafone also suffered tightening profit margins in the competitive Spanish market, as well as falling revenues in Italy.
Profits in its latest financial results were boosted by six-month revenues in Turkey up 28% and India up 18.4%.
There were also robust performances in the UK, Germany and the Netherlands.
Chief Executive Vittorio Colao remained optimistic: “Although the macroeconomic outlook is uncertain, we are confident that we can continue to execute successfully in the second half of the financial year.”
Positive Points for the future:
- Full year profit guidance has been upgraded.
- A strategy to deliver sustainable revenue growth and stabilising margins, combined with the pursuit of value from the group’s non-controlled investments is being pursued. Proceeds from its China Mobile and SFR stake sale are being used to both buy-back stock and reduce net debt.
- Mobile data revenue was up 23.8% year-on-year to £3.1 billion, and now represents 14% of group service revenue.
- Vodafone continues to enjoy strong momentum in Emerging Markets: India service revenue +18.4%, Turkey +27.9%, Vodacom (South Africa) +7.3%.
- Vodafone’s share of profits from Verizon Wireless totalled £2.5 billion, up 11.1% year-on-year. Verizon Wireless’ net debt fell from US$9.6 billion at 31 March 2011 to US$3.1 billion at 30 September 2011. In July, Verizon Wireless announced its intention to pay a dividend of US$10.0 billion to its shareholders in January 2012. Vodafone’s share of this dividend is US$4.5 billion (£2.8 billion).
- Costs saving programmes at the group remain ongoing.
- A progressive dividend policy continues to be pursued. The board has agreed an interim dividend of 3.05 pence per share, an increase of 7.0% year-on-year, in line with its dividend per share growth target of at least 7% per annum until March 2013. In addition, in July the Group announced its intention to pay a special dividend of 4.0 pence per share, with the same timetable as the interim dividend, to reflect the receipt of a dividend from Verizon Wireless.
2 Responses to “Vodafone lifts profits on global sales increases”
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