On Monday, Vodafone, the second-largest telecom operator in the world, nudged up its earnings forecast, saying it was increasingly optimistic after a “resilient” first half, despite the effect of COVID-19 obscuring its underlying momentum.
As international travel was curtailed by the pandemic, the British business was affected by the loss of roaming sales, resulting in a 0.4% decrease in group service revenue in the second quarter.
Service revenue increased 1.5%, except roaming, the company said, supported by increases in its European contract customer base to 65 million and it’s broadband customers to 25.4 million, and speed-level unlimited mobile data plans in nine countries.
The results underlined “increased trust” in the outlook and showed success in increasing customer loyalty, extending its fixed broadband base and effectively delivering 5G through network sharing, Chief Executive Nick Read said.
“Overall, I’m satisfied with the speed and progress of our strategy,” he told reporters on Monday.
For the year ended March, Vodafone put figures on its adjusted core earnings target: EUR 14.4 billion (approximately Rs. 1,26,900 crores) to EUR 14.6 billion (approximately Rs. 1,28,600 crores), compared to EUR 14.5 billion (approximately Rs. 1,27,800 crores) in the previous year.
They will be “flat to slightly down” it had previously said. EUR 14.37 billion (approximately Rs. 1,26,700 crores) was predicted by analysts. Shares rose to 125 pence (approximately Rs. 100) by as much as 4%, the highest level since late July.
Vodafone, which plans to list its Frankfurt tower spin-out company early next year has also reported its full-year free cash flow guidance of at least EUR 5 billion (approximately Rs. 44,000 crores) ahead of Monday’s spectrum and restructuring costs.
He said, however, that Vodafone decided to spin-out its interest in its CTIL joint venture with Telefonica. “We have done a tremendous amount of work with Tef (Telefonica) and eventually it is our goal to roll our CTIL stake into Vantage Towers, preferably ahead of the IPO,” he said.
Vodafone posted adjusted earnings of EUR 7 billion for the six months to the end of September (approximately Rs. 61,600 crores), down 1.9%, on a 2.3% decrease in group sales to EUR 21.4 billion (approximately Rs. 1,88,500 crores).