Vodafone raises forecasts on growth
Vodafone Group Plc, the world's biggest provider of mobile-phone services, raised its sales and profit forecasts on accelerating growth in India and Turkey, as well as higher revenue from wireless Internet access in Europe.
Net income in the six months to September 30 was 3.29 billion pounds, or 6.19 pence a share, compared with a year-earlier loss of 5.1 billion pounds, or 8.88 pence, Vodafone said yesterday in a statement. Profit beat the median estimate of 3.03 billion pounds in a Bloomberg News survey of analysts.
Vodafone rose as much as 4.2 percent in London trading. The Newbury, England-based company bought India's Hutchison Essar Ltd in May to gain access to the world's fastest-growing major wireless market.
Chief Executive Officer Arun Sarin also is cutting costs and getting more Web-usage revenue from customers in Europe, where most people already have a mobile phone.
"This totally vindicates Sarin's strategy," said Adam Steiner, head of research in London at SVG Capital Plc, which manages 4.5 billion euros and whose biggest holding is Vodafone. "The good news is data, Turkey and India."
Sales rose 9 percent to 17 billion pounds, beating the estimate of 16.9 billion pounds in a survey of 11 analysts. Vodafone had 241 million customers at the end of September.
Vodafone shares rose 6.3 pence, or 3.5 percent, to 188.3 pence at 10:05 am in London, after climbing as high as 189.7 pence. Before yesterday, they had risen 29 percent this year, making the company the second-best performer in the 20-member Bloomberg Europe Telecommunication Services Index, behind Telefonica SA.
Higher forecasts
Vodafone raised its revenue, adjusted operating profit and cash flow forecasts for fiscal 2008, which ends in March next year. Sales will be 34.5 billion pounds to 35.1 billion pounds, adjusted operating profit will be 9.5 billion pounds to 9.9 billion pounds and free cash flow will be 4.4 billion pounds to 4.9 billion pounds. The company raised its interim dividend by 6 percent to 2.49 pence a share.
In May, Vodafone said fiscal 2008 sales would be 33.3 billion pounds to 34.2 billion pounds, and forecast adjusted operating profit of 9.3 billion pounds to 9.8 billion pounds.
Earnings before interest, taxes, depreciation and amortization rose 5.2 percent to 6.57 billion pounds. Profit on that basis was forecast to climb to 6.41 billion pounds, the median estimate of 13 analysts.
'Hero'
The results and the forecast may deflect future criticism from some investors. At the annual meeting in July, shareholders backed Sarin and rejected a plan by a money manager to spin off Vodafone's stake in US carrier Verizon Wireless. In 2006, Sarin was opposed by investors holding 9.5 percent of shares voted.
"The talk about Sarin being under pressure" has ended, said SVG's Steiner. "A couple more of these results and he can leave a hero."
Vodafone's sales in Europe rose 2 percent to 12.7 billion pounds in the period. That compares with the median analyst estimate of 12.6 billion pounds.
The gains in data sales are a "real trend" and not just a one-time anomaly, Sarin told reporters on a conference call. "Mobile data is a permanent phenomenon now," he said.
Bloomberg News
(China Daily 11/14/2007 page16)
