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Vodafone raises forecasts

13 ноября 2007

Vodafone raised its guidance for its annual results on Tuesday after reporting a 1.6 per cent increase in adjusted operating profit for the first half of its financial year.

Vodafone raises forecastsThe mobile phone operator also raised the interim dividend by 6 per cent, a bigger increase than it had earlier promised.

The shares jumped 3.7 per cent in afternoon trading, rising 6.7p to 188.7p, continuing their strong run of recent months.

Arun Sarin, chief executive, said the improvement showed the group was delivering on its strategy. He said the group had added a net 20m customers during the half year giving it a total 241m at the end of September. The group now had 21m third-generation devices in operation, a 92 per cent increase year-on-year, he said.

Vodafone now expects revenue for the full year to next March to be in the range of £34.5bn to £35.1bn ($72.6bn), up from its previous range of £33.3bn to £34.1bn, after first-half revenue rose by 9 per cent to £17bn. That largely reflected a 39.9 per cent increase in revenue from its operations outside Europe, boosted by the inclusion of acquisitions in India and Turkey. Revenue from Europe rose by 2 per cent. Excluding acquisitions, group revenue increased 4.4 per cent.

Vodafone also lifted the range of its forecast for adjusted operating profits to the upper end of its previous range, saying it expected the outturn to be between £9.5bn and £9.9bn, rather than £9.3bn to £9.8bn.

Mr Sarin said that free cash flow would also be higher than previously predicted. That has allowed the dividend increase, which he said “reflects our views on our current performance and prospects.”

The group continued to suffer competitive pressure in Europe, which reduced profit margins and led to a 2.7 per cent fall in operating profit to £3.27bn. The earnings before interest, tax, depreciation and amortisation (ebitda) margin fell from 39.5 per cent to 38.2 per cent.

Mr Sarin said the fall in ebitda margins was in line with expectations and the group’s strategy had offset pricing pressures in Europe. The cost reduction programme was on track or ahead of schedule.

Adjusted operating profit from the group’s businesses outside Europe rose 6.1 per cent to £1.74bn, although here too the ebitda margin fell, from 35.8 per cent to 33.2 per cent because of the inclusion of Turkey, where margins are lower, and as the group stepped up investment in winning new customers.

Mr Sarin said the Indian business had now been integrated and rebranded under the Vodafone name. It now had more than 35m customers there and was adding 1.6m each month.

The group is being pursued by the tax authorities in India, which is claiming $2bn in capital gains tax on the acquisition of a majority stake in local group Hutchison Essar. Andy Halford, chief financial officer, said Vodafone was “absolutely comfortable that there is no basis for us being taxed on the transaction.” The issue is due to go to court next month.

In South Africa, Mr Sarin said, the group was hoping to increase its stake in Vodacom from the current 50 per cent if it could do so at a reasonable price, but aimed to keep a minority of Vodacom shares listed.

He said Verizon Wireless in the US, in which Vodafone has a minority stake, was performing well, with revenues up 16 per cent and ebitda up 17 per cent. Vodafone previously fought off activist investor attempts to force it to sell its Verizon interest.

The interim dividend is up 6 per cent to 2.49p, costing £1.3bn, while adjusted earnings per share rose 7.4 per cent to 6.42p.

On a reported basis group pre-tax profits were £4.56bn compared with a loss of £3.33bn as the group took an impairment charge in the comparable period.

Источник: Financial Times

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