Vodafone’s full year operating profit guidance at £5 billion

Vodafone Group has confirmed full year guidance of adjusted operating profit at around £5 billion and free cash flow at around £4.5 – £5 billion

Today Vodafone Group announced H1 revenues of £22 bn, up 1.2 percent year-on-year whereas Q2 group organic service revenue on a management basis declined 4.9 percent. North and Central Europe revenue was down 4.9 percent, South Europe revenue was down 15.5 percent whereas AMAP was up by 5.7 percent.

H1 EBITDA on a management basis was down 4.1 prcent to £6.6 billion, adjusted operating profit on a management basis was £5.7 billion and free cash flow on a management basis was £2.0 billion.

Of $130 billion sale of US Group (Verizon Wireless) announced, $84 billion is expected to be returned to shareholders. Additional deferred tax assets of £17.7 billion recognised in relation to the Group’s historical tax losses and £3.0 billion tax charge recognised in relation to the sale of the US Group.

Project Spring organic investment programme will help in accelerating and extending Vodafone 2015 strategy with continued focus on data, enterprise and emerging markets.

Additional investment increased to around £7 billion by March 2016, to establish stronger network and service differentiation in major markets. All this will help in peak impact on EBITDA from higher operating expenses of up to £0.6 billion in the 2015 financial year and neutral to EBITDA by the 2017 financial year. The group will have an incremental free cash flow of over £1 billion in 2019 financial year.

Vittorio Colao, group chief executive commented, “Whilst trading conditions in Europe remain very tough at present, we are encouraged by the forecast return to economic growth over the next two years and the potential for a shift in regulatory focus to support greater industry investment and consolidation.”

“We have continued to make good progress in delivering our long-term strategy. Our emerging markets businesses are performing very well, driven by rapidly increasing smartphone penetration and data usage. In mature markets, our performance reflects more challenging conditions, which we continue to mitigate through ongoing actions to improve our operating model and cost efficiency. This rigorous approach, plus our substantial investments in Vodafone Red, 4G and unified communications services – including our recent acquisition of Kabel Deutschland – are laying strong foundations for the future,” said Colao.

Our Project Spring organic investment programme – now increased to £7 billion – will accelerate further our plans to establish stronger network and service differentiation for our customers added Colao.

The pending $130 billion US transaction will help in rewarding shareholders for their long-term support and help Vodafone Group with a strong balance sheet, improved dividend cover and the financial and strategic flexibility to make further investments in the business in future.

Also Read

Leave a Reply

%d bloggers like this: