Vodafone set to cut costs further as 1H09 operating profit increases 2.9% y-o-y

10 Nov 2009

British telecoms giant Vodafone Group has said it plans further cost-cutting measures as it revealed a 2.4% year-on-year increase in adjusted operating profit for the six-month period ended 30 September 2009. The company posted an adjusted operating profit of GBP5.9 billion (USD9.11 billion) for its first fiscal half of 2009/10, while group revenue rose 9.3% y-o-y to GBP21.8 billion and group earnings before interest, tax, depreciation and amortisation (EBITDA) increased to GBP7.5 billion, up 2.9% against the same period a year earlier. Commenting on the results, Vodafone Group CEO Vittorio Colao noted: ‘The Group has performed in line with our expectations and we have made strong progress with our strategic priorities, in particular in mobile data and cash generation. We have confirmed our guidance for the full year, despite the uncertainties of current economic trends. The GBP1 billion cost reduction programme is expected to be delivered a year ahead of plan and we have extended this to a further GBP1 billion of cost savings by 2012. At the same time, we have maintained our capital investment at GBP2.6 billion in the first half, delivering further improvements in network quality and performance for our customers.’

Revenue from Vodafone’s European operations were weak as expected, due predominantly to increased competition and the difficult economic climate, with the group’s European revenue falling 4.5% against 1H08/09, despite data growth of 17.8% and fixed line growth of 7.3%. Africa and Central Europe reported more positive results however, posting a 34.6% increase in service revenue against the same period last year, which Vodafone said reflected the full consolidation of Vodacom following its purchase in May 2009.

At the end of September 2009 Vodafone Group had a total of 323.27 million subscribers, up 15.7% against the 279.5 million it had at end-September 2008.

United Kingdom, Vodafone Group