Vodafone edges outlook higher on strong first half

Reuters, Tuesday 8 Nov 2011

Results for global mobile operator group are boosted by strong uptake in emerging markets and growth in organic service revenues

Vodafone
Global future looks good for Vodafone, also one of Egypt's major mobile operators (Photo: Reuters)

Vodafone edged its full-year outlook higher on Tuesday 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.

Vodafone is one of Egypt's three mobile services operators.
 
The results were boosted by strong growth in India and robust performances in Germany and Britain. Growth in Turkey inevitably slowed but remained solid.
 
However the group showed that it was still facing tough conditions in Italy, where organic service revenue fell 3 per cent in the second quarter from down 1.5 per cent 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 per cent in the second quarter from down 9.9 per cent in the first. The company took an impairment loss of 450 million pounds (US$721 million) in relation to Vodafone Greece.
 
It moved its outlook for full-year adjusted operating profit to the top end of its range, predicting profits of between 11.4 billion pounds and 11.8 billion pounds compared with an earlier forecast of 11 billion pounds to 11.8 billion pounds.
 
"They're really great numbers," analyst Will Draper at Espirito Santo told Reuters. "Revenues are up 1 percent on the consensus and they've raised the operating guidance toward 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 per cent which was a long way better than consensus at 1.1 per cent and within that the really encouraging thing was Europe which was only down 1.2 per cent, compared to the forecast of minus 1.7."
 
The group posted first-half revenue up 4.1 percent to 23.5 billion pounds and core earnings up 2.3 per cent to 7.5 billion pounds. Analysts had been expecting group revenue at 23.4 billion pounds and earnings at 7.4 billion pounds.
 
On the key industry metric of group organic service revenue, which relates to the provision of ongoing services, the group was up 1.4 per cent in the first half and up 1.3 per cent in the second quarter.
 
It had been up 1.5 per cent in the first quarter and analysts were expecting growth of 1.1 per cent according to a Reuters poll of analysts.
 
Ahram Online's look at Vodafone's performance in Egypt will follow shortly
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