* See full-year earnings of 14.4 bln to 14.6 bln euros
* Progress obscured by COVID impact on service revenue
* Intends to put stake in Telefonica JV into towers company
* Shares rise 4%
(Adds CEO comments, shares)
By Paul Sandle
LONDON, Nov 16 (Reuters) - Vodafone, the world's
second largest mobile operator, nudged up its earnings outlook
on Monday, saying it was increasingly confident after a
"resilient" first half, despite the impact of COVID-19 obscuring
its underlying momentum.
The British company was hit by the loss of roaming revenue
as international travel was curtailed by the pandemic, resulting
in a 0.4% drop in group service revenue in the second quarter.
Excluding roaming, service revenue grew 1.5%, the company
said, helped by rises in its European contract customer base to
65 million and its broadband customers to 25.4 million, and
speed-tiered unlimited data mobile plans in nine markets.
Chief Executive Nick Read said the results underlined
"increased confidence" in the outlook and demonstrated progress
in increasing customer loyalty, growing its fixed broadband base
and delivering 5G efficiently through network sharing.
"Overall I'm pleased with pace and performance against our
plan," he told reporters on Monday.
Vodafone put numbers on its adjusted core earnings target
for the year to end-March: 14.4 billion euros to 14.6 billion
euros, compared to 14.5 billion euros for the previous year.
It had previously said they would be "flat to slightly
down". Analysts were forecasting 14.37 billion euros.
Shares rose as much as 4% to 125 pence, the highest level
since late July.
Vodafone, which plans to list the spin-out of its towers
business in Frankfurt early next year, also confirmed its
full-year free cashflow guidance of at least 5 billion euros
before spectrum and restructuring costs on Monday.
Read said more details on the IPO plan would be given to
investors on Tuesday.
However, he said Vodafone wanted to put its stake in its
CTIL joint venture with Telefonica into the spin-out.
"We have done a significant amount of work with Tef
(Telefonica) and it is our intention ultimately to roll our
stake in CTIL into Vantage Towers, ideally ahead of the IPO," he
said.
For the six months to the end of September, Vodafone
reported adjusted earnings of 7.0 billion euros, down 1.9%, on a
2.3% drop in group revenue to 21.4 billion euros.
(Editing by Sarah Young, Kirsten Donovan)