June 26, 2022

British mobile operator company Vodafone announced having recorded better-than-expected growth in earnings in its first half over a good performance in Germany, its largest market, and leading to increased free cash flow forecast.

The telecom company’s shares rose as much as 6% after the reports, which have fallen 15% since the start of its financial year.

According to reports, the British company had raised the floor of its full-year earnings guidance to 15.2 billion euros ($17.3 billion) from 15.0 billion euros. While the top remaining at 15.4 billion, and increased free cash flow target by 100 million euros to at least 5.3 billion euros.

Vodafone, Chief Executive Nick Read mentioned that their overall strengthened performance in Africa and Europe has put it on track to be at the top end of their guidance for this year, and within the medium-term financial ambitions.

Vodafone’s total revenue in the six months to end-September was reported to grow 5% to 22.5 billion euros. This was driven by service revenue growth in Europe and Africa and a recovery in handset sales after COVID-19 disruption in the prior year.

The company’s adjusted core earnings also rose 6.5% rise to 7.6 billion euros.

According to Vodafone, its organic service revenue grew in both Germany and Britain, but fell in Italy, and in Spain after growth in the first quarter dispersed in the second quarter.

Read further mentioned that consolidation was required in markets such as Spain, Italy and Portugal, where all market players were suffering otherwise.

The telecom company has been almost at the end of talks with the European Commission and member states, along with Britain and countries in Africa where it operates.

Lastly, he also mentioned that it was pursuing an industrial merger opportunities for its Vantage Towers infrastructure spin-out, which would result in it selling down its controlling stake.

Analysts on the other hand are expected to nudge up forecasts.

According to a compiled consensus from the company-, It had earlier expected to report earnings of 15.2 billion euros this year and generate cash flow of 5.23 billion euros.