Vodafone Turns To Profit In H1, Lifts FY18 Earnings View; Stock Up

Shares of Vodafone Group Plc (VOD.L,VOD) were gaining around 6 percent in the morning trading in London after the British telecom giant reported a profit in its first half, compared to a hefty loss last year, on the absence of prior year’s charge. Revenues meanwhile declined from last year primarily due to the deconsolidation of Vodafone Netherlands. Looking ahead, the company lifted its outlook for fiscal 2018 organic adjusted EBITDA growth.

Vittorio Colao, Group Chief Executive, said, “In the second half of the year we will continue to implement our strategic initiatives, including fibre infrastructure expansion in Germany, Portugal and the UK; our entry into the consumer IoT market with the launch of “V by Vodafone”; and the ‘Digital Vodafone’ programme designed to enhance our customers’ experience, increasing revenues and cost efficiency.”

Profit for the first half attributable to owners of the parent was 1.13 billion euros, a substantial improvement compared to a loss of 5.13 billion euros in the prior half-year, which was impacted by a 5.0 billion euros net impairment of the Group’s operations in India.

For the first half, profit from continuing operations surged to 1.58 billion euros from 278 million euros in the previous year. Earnings per share from continuing operations were 5.25 in euro cents compared to 0.54 euro cents.

Adjusted earnings per share from continued operations increased 54.9 percent to 6.32 euro cents. Operating profit rose 32.5 percent from last year to 2.0 billion euros.

First-half Group adjusted EBITDA increased 4.2 percent to 7.4 billion euros, with organic growth in Europe and AMAP partly offset by foreign exchange movements and the deconsolidation of Vodafone Netherlands.

Organic adjusted EBITDA grew 13 percent and organic adjusted EBITDA grew 9.3 percent.

First-half revenue decreased 4.1 percent to 23.08 billion euros from 24.05 billion euros last year. Organic revenue growth was 3.1 percent.

Service revenue decreased 5.6 percent to 20.6 billion euros. Organic service revenue were up 1.7 percent.

Revenue grew organically in the majority of markets driven by mobile data and continued success as Europe’s fastest growing broadband provider. Enterprise revenues continue to grow, led by Internet of Things, Cloud and Fixed services.

Vodafone India service revenues declined 15.8 percent and adjusted EBITDA was down 39.2 percent. The company noted that its merger with Idea Cellular is progressing well.

The company said competition…

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