Vodafone says rebounds into first-half net profit

Looking ahead, the company lifted its outlook for fiscal 2018 organic adjusted EBITDA growth.

Operating profit jumped nearly a third to 2.0 billion euros in the first half of 2017, boosted by falling costs and lower taxation.

The net profit comparison was skewed by a writedown in India past year, but the company said cost efficiencies helped to boost EBITDA and operating profits. Adjusted basic earnings per share, which excludes the results of Vodafone India which are now included in discontinued operations, were 6.32 eurocents, an increase of 54.9% year-on-year. Net debt rose to €32.1bn at the end of September from €31.2bn at the end of march, as free cash flow and net proceeds from the sale of shares in South African mobile company Vodacom were offset by the payment of last year's final dividend of €2.6bn.

United Kingdom operator group Vodafone is having a good few months, culminating in the first upward revision of its organic EBITDA growth for ages.

Total revenue for the first half fell 4.1% to €23.1bn, with the group blaming the deconsolidation of its Vodafone Netherlands and foreign exchange headwinds. Organic revenue growth was 3.1 percent.

Vodafone had taken an impairment of 5.0 billion euros on its Indian activities in the first half of 2016. Organic service revenue were up 1.7 percent.

Vodafone group CEO Vittorio Colao said: "Revenue grew organically in the majority of our markets driven by mobile data and our continued success as Europe's fastest growing broadband provider". Enterprise revenues continue to grow, led by Internet of Things, Cloud and Fixed services. In Europe, service revenue in H1 declined 0.2 percent, while AMAP grew 6.8 percent. Colao added that the company is making good progress getting the necessary regulatory approvals for its merger with Idea Cellular and the monetisation of its tower assets.

The company said competition remains intense in India, but there are however signs of positive developments in the Indian market, with consolidation of smaller operators and recent price increases from the new entrant.

The company will be raising its full-year guidance for organic adjusted EBITDA growth to around 10 percent, from its previous guidance of 438 percent, to Euro 14.75-14.95 billion, heartened by stronger than expected underlying European revenue growth and the later than expected commercial launch of a new entrant in Italy.

FCF pre-spectrum is expected to exceed 5 billion euros, which was previously guided to be around 5 billion euros.

The company said the increased forecast, which implies core earnings of €14.75bn-€14.95bn, reflected stronger than expected underlying revenue growth in Europe and a later than anticipated launch of a new entrant in Italy.

About 55.41M shares traded.

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