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November 11, 2009

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Vodafone arrives on target with 15% profit rise

TELECOMMUNICATIONS company Vodafone Group Plc yesterday reported a 15 percent increase in first-half net profit. Results were boosted by favorable currency movements, lower taxes and expansion at its Verizon Wireless venture in the United States.

For the six months ending September 30, Vodafone made a net profit of 4.58 billion pounds (US$7.6 billion), up from 3.99 billion pounds a year earlier.

Group revenue from continuing operations, however, was down 3 percent, the company said, while reported revenue - which accounts for businesses it has bought or sold - rose 9 percent to 21.8 billion pounds.

Vodafone shares were down 2.9 percent at 134 pence in mid-morning trading on the London Stock Exchange.

"Whilst the results have broadly met analysts' expectations, a continued dependency on cost-cutting measures fails to truly inspire," said Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers.

Jonathan Groocock at Investec Securities said Vodafone had returned a "decent set" of results, with excellent cash generation and an improved outlook on cost savings." His recommendation: "Buy."

Revenue rose 3 percent in Europe, benefiting from foreign exchange movements; revenue in Africa and Central Europe was up 36 percent, including the acquisition of a controlling stake in South Africa's Vodacom, and revenue in Asia Pacific and Middle East rose 16 percent.

In the second quarter Vodafone added 9.7 million mobile customers, raising the total to 303 million.



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