UK-based Vodafone Group has announced its financial results for the six months ended 30 September 2010, and at the same time has detailed its strategies for moving the company forward.
In the first six months of its 2010/11 financial year Vodafone posted revenues of GBP22.6 billion (USD36.5 billion), up 3.9% year-on-year, with organic revenue growth of 1.8% for the first half of the year. The group said the turnover from its European operations declined by 1.3% against the same period a year earlier, although it noted that in the second quarter the rate of decline slowed, reflecting growth in the UK and Germany and the continued weakness in Spain. Revenues from its Africa and Central Europe division meanwhile rose by 20.1% y-o-y, which it attributed in part to favourable foreign exchange rate movements and the impact of the acquisition of a controlling stake in South Africa-based Vodacom, while Asia Pacific and Middle East service revenue increased by 22.2%, with strong contribution from the group’s Indian subsidiary highlighted. Group earnings before interest, tax, depreciation and amortisation (EBITDA) for H1 2010 declined by 1.7 percentage points, which Vodafone said was in line with expectations, following ‘increased commercial investment in Europe mostly funded by the group’s cost efficiency programmes’. On the back of the financial results Vodafone announced that it was increasing its full year guidance for adjusted operating profit to between GBP11.8 billion and GBP12.2 billion, up from the previous forecast of between GBP11.2 billion and GBP12.0 billion.
Commenting on the results, Vittorio Colao, Vodafone Group CEO, noted: ‘I am pleased to report a further improvement in organic service revenue growth, together with upgraded guidance. We have also today announced an updated strategy, which positions Vodafone to realise further value from non-controlled assets, take full advantage of the most valuable telecommunications growth opportunities ahead and which will deliver sustainable revenue growth, stabilising margins and strong free cash flows.’
In line with the plans to accelerate the sell-off of minority assets and other non-core holdings Vodafone has announced that it is selling off its interest in Japan’s Softbank Corp for GBP3.1 billion. Under the proposed deal, the UK-based mobile giant has offloaded its interest in loan notes and preferred stock and share acquisition rights in two Softbank subsidiaries. The notes and stock and share purchase rights were originally received as part of the sale of Vodafone Japan in 2006. It is understood Vodafone will receive the proceeds of the sale in two stages: GBP1.6 billion will be received in December this year to pay down group net debt; a further GBP1.5 billion will be transferred in April 2012.
In September 2010 Vodafone sold a stake in China Mobile Ltd. for USD6.5 billion in the biggest divestment since Colao took charge. The British mobile giant is also known to be reviewing its stake in French mobile operator SFR and US counterpart Verizon Wireless, and is considering the sale of its equity stake in Polish cellco Polkomtel.