Vodafone bounces back, as it puts Indian write-down behind it
London — British mobile phone giant Vodafone rebounded back into a first-half net profit, as the previous year’s Indian write-down was not repeated, it said Tuesday.
Vodafone, the second-largest mobile operator globally and majority owner of SA operator Vodacom, raised its forecast for full-year earnings growth to about 10%, from 4-8%.
Earnings after taxation hit €1.131bn in the six months to the end of September, it said in a results statement.
Vodafone had suffered a spectacular net loss of €5.129bn in the same part of last year, when it was plagued by an enormous write-down on the value of its Indian business.
Operating profit jumped almost a third to €2bn in the first half of 2017, boosted by falling costs and lower taxation.
"In the first half of the year we have maintained good commercial momentum," CEO Vittorio Colao said.
Turnover meanwhile sagged 4.1% to €23.1bn, due partly to the deconsolidation of its Dutch unit, Vodafone Netherlands.
Sales were also affected by the weak pound, which tumbled following last year’s shock EU exit referendum.
In India, Vodafone reported progress but admitted that competition remained fierce.
Vodafone lifted its full-year guidance for growth in underlying profit — as measured by earnings before interest, taxes, depreciation and amortisation (ebitda) — to 10% from 4%-8%.
"We are able to report a strong financial performance, with substantial … profit growth, and we are raising our financial outlook for the year," said Colao.
The company said the increased forecast, which implies core earnings of €14.75bn-€14.95bn, reflected stronger than expected underlying revenue growth in Europe and a later than anticipated launch of a new entrant in Italy.
It said free cash flow would also beat its previous expectation, coming in above €5bn rather than about €5bn.
AFP and Reuters