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Weak pound boosts Vodafone results

Weak pound boosts Vodafone results
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First Published: Tue, Feb 03 2009. 01 16 PM IST
Updated: Tue, Feb 03 2009. 01 16 PM IST
London: Vodafone Group, the world’s largest mobile phone group by sales, beat third-quarter forecasts for revenues on Tuesday and increased its guidance to reflect foreign exchange movements.
It also said it was making good progress with its cost-savings programme.
The group posted an increase in revenues in the quarter ending 31 December of 14.3% to £10.47 billion, boosted by exchange rates. Revenues were down 1% on an organic basis.
Analysts had been expecting group revenues of £10.37 billion ($14.68 billion) according to a Reuters poll of 9 analysts.
Vodafone said organic revenue in Europe was down 1.4% following further weakness in Spain, although it had seen solid results from Germany and Italy and stabilisation in Britain.
Turkey was also weak.
Vodafone cut its full-year revenue outlook in November when it reported its half-year results, but still managed to please investors when it said it would maintain profits and boost free cash flow by cutting £1 billion of costs.
On Tuesday it increased the guidance due to foreign exchange movements but confirmed the underlying ranges.
“Our underlying performance showed similar trends to the previous quarter,” chief executive Vittorio Colao said in the statement.
“In the context of the current economic environment, we have continued to implement our strategy, with an emphasis on customer value, mobile data, enterprise and fixed broadband.
“We have also made progress on our plans to reduce costs by £1 billion by March 2011. Underlying guidance is confirmed.”
For the year ending 31 March, it now expects a revenue range of £40.6 to £41.5 billion, from a previous range of £38.8 to £39.7 billion. Adjusted operating profit is now forecast to be between £11.5 and £12 billion, from the previous range of £11 to £11.5 billion.
Free cash flow is forecast at £5.5 to £6 billion, from the previous £5.2 to £5.7 billion.
In an update on the cost-savings programme, it said good progress had been made and cost savings of approximately £500 million were expected to be generated by the end of the 2010 financial year.
The remainder is expected to be generated by the 2011 financial year.
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First Published: Tue, Feb 03 2009. 01 16 PM IST
More Topics: Company results | Vodafone | Revenue | Q3 | Forex |