Vodafone Posts Decline In H1 Profit, Lifts Earnings Forecast

Vodafone Group PLC VOD posted a drop in its first-half profit. Vodafone's net profit for the six months slipped to GBP5.42 billion ($8.59 billion), versus a year-ago profit of GBP17.95 billion. Its operating profit before exceptional items dropped 30% to GBP1.76 billion. The company's revenue rose 8.9% to GBP20.75 billion, while organic service revenue fell 2.8% to GBP19.1 billion. The company's revenue in the second quarter, excluding handset sales and mergers and acquisitions, dropped 1.5%, versus a 4.2% drop in the prior three months and a 4.9% decline in the year-ago period. On the same basis, Vodafone's Europe revenue dropped 5% in the quarter, versus a 7.9% decline in the prior fiscal quarter. Revenue from Africa, Middle East and Asia Pacific, including India, gained 5.7%. The company recommended an interim dividend of 3.6 pence per share, a rise of 2% y/y. Net debt as at 30 September 2014 was £21.8 billion. For the full year, Vodafone now projects earnings before interest, tax, depreciation and amortization of GBP11.6 billion to GBP11.9 billion, versus previous forecast of GBP11.4 billion to GBP11.9 billion. Vittorio Colao, Group Chief Executive, said, “Our markets continue to be highly competitive, and regulatory and macroeconomic risks remain. However, we are not yet half way through our investment programme, and there is still much more we will do to build a differentiated service for customers and improve perception.” Vodafone's shares fell 0.15% to close at $33.02 yesterday.