Vodafone lowers FY outlook, updates strategy

Tuesday 11 November 2008 | 08:47 CET | News
Vodafone Group has lowered its outlook for revenues in the fiscal year to March 2009 due to the economic slowdown in Europe. The mobile operator now expects annual sales of GBP 38.3-39.7 billion, down from an earlier outlook of around GBP 39.8 billion. The company left its adjusted operating profit outlook unchanged at GBP 11.0-11.5 billion, supported by cost reductions and foreign exchange effects, and slightly increased the free cash flow target to GBP 5.2-5.7 billion. The capex budget was trimmed to GBP 5.2-5.7 billion due to the lower revenue outlook. The more difficult economic environment has contibuted to the new CEO Vittorio Colao updating the company's strategy, first laid out in May 2006. Colao plans to focus more on flat-rate pricing to build loyalty among high-end customers, improving execution in the operator's emerging markets, expanding further in the business user and broadband markets and tightening capital spending to boost cash flow. He signalled big acquisitions by Vodafone are unlikely, and the company would support more in-market consolidation. For the fiscal first half to September, Vodafone reported revenues up 17.1 percent year-on-year to GBP 19.90 billion, and EBITDA up 10.3 percent to GBP 7.24 billion. Pro forma for acquisitions and excluding forex effects, revenues rose 2.6 percent, with a 1.1 percent decline in Europe offset by an 8.8 percent rise in the EMAPA region. The adjusted operating profit rose 10.5 percent to GBP 5.77 billion, as a 7.7 percent organic decline in Europe was offset by 14.9 percent growth in EMAPA. Net profit was down 34.8 percent to GBP 21.7 billion, due mainly to an impairment charge of GBP 1.7 billion at Vodafone Turkey.

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Categories: Mobile & Wireless
Countries: World
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