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* Mobile phone company raises floor of earnings guidance
* Sees free cash flow of at least 5.3 bln euros this year
* First-half adjusted core earnings up 6.5%
* Shares rise 6%
(Adds further CEO comments on consolidation, updates shares)
By Paul Sandle
LONDON, Nov 16 (Reuters) - Mobile operator Vodafone
increased its free cash flow forecast on Tuesday after it
reported better-than-expected growth in earnings in its first
half, driven by a good performance in Germany, its largest
market.
Vodafone shares, which have fallen 15% since the start of
its financial year, rose as much as 6%.
The British company raised the floor of its full-year
earnings guidance to 15.2 billion euros ($17.3 billion) from
15.0 billion euros, with the top remaining at 15.4 billion, and
increased its free cash flow target by 100 million euros to at
least 5.3 billion euros.
Chief Executive Nick Read said Vodafone had "solid
commercial momentum".
"Our strengthened performance in Africa and Europe puts us
on track to be at the top end of our guidance for this year, as
well as firmly within our medium-term financial ambitions," he
said.
Vodafone said its total revenue grew 5% to 22.5 billion
euros in the six months to end-September, driven by service
revenue growth in Europe and Africa and a recovery in handset
sales following COVID-19 disruption in the prior year.
Adjusted core earnings rose 6.5% rise to 7.6 billion euros
Organic service revenue grew in both Germany and Britain,
but fell in Italy, and declined in Spain after growth in the
first quarter evaporated in the second.
Read said consolidation was needed in markets such as Spain,
Italy and Portugal, where "all players were suffering".
"I definitely feel consolidating from five to four is very
logical without any punitive remedies," he told reporters,
adding that the company was to that end talking to the European
Commission and member states as well as Britain and countries in
Africa where it operates.
He also said it was pursuing industrial merger opportunities
for its Vantage Towers infrastructure spin-out, which would
result in it selling down its controlling stake.
Analysts are likely to nudge up forecasts. They had expected
Vodafone to report earnings of 15.2 billion euros this year and
generate cash flow of 5.23 billion euros, according to a
company-compiled consensus.
($1 = 0.8793 euros)
(Reporting by Paul Sandle; Editing by Kate Holton and Emelia
Sithole-Matarise)
