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Vodafone Posts First Half Profit Driven by Emerging Markets
Vodafone has reported a first half profit of £3.29 billion (US$6.8 billion) compared to an accounting loss of £5.1 billion (US$10.6 billion) a year ago. Sales jumped by 9% to £17 billion (US$35.3 billion). Vodafone added 35 million new customers and had 241 million proportionate customers at the end of September. The company gained 20 million new customers from wholly owned operations - the rest is based on its shareholdings in other companies.
Vodafone also raised its revenue, adjusted operating profit and cash flow forecasts for the full year 2008. Sales are expected to be in the region of £34.5 billion to £35.1 billion, operating profit will be £9.5 billion to £9.9 billion and free cash flow will be £4.4 billion to £4.9 billion.
Arun Sarin, CEO said "Our focus is on four key areas which together are expected to represent around 20% of Group revenue by the 2010 financial year. In the first half, these areas contributed about 12% of revenue, up from around 10% in the prior year. Data revenue increased by 45.1% on an organic basis, principally enabled by the rapid growth in 3G devices, which nearly doubled year on year to over 21 million devices. We have also refreshed our consumer mobile internet offering in eight markets, supported by partnerships with leading internet players, and are continuing to develop products and services to integrate the mobile and PC environments."
The company's recently acquired Indian business is delivering very strong growth. Average net customer additions are running at 1.6 million per month, with a customer base of over 35 million at the end of September. Year on year revenue growth was around 53% on a constant currency basis.
The controversial tax liabilities which upset the markets last year still hang over the company - and Vodafone said that it still expects that further significant cash payments for tax and associated interest may be made in respect of long standing tax issues. Whilst the timing of such payments remains uncertain, the Group now expects resolution of the most significant issues, principally the application of the UK Controlled Foreign Company legislation to the Group, to be later than previously anticipated.
Posted to the site on 13th November 2007