LONDON (Alliance News) - Vodafone Group PLC Tuesday narrowed its guidance slightly upward for the 2015 financial year and raised its interim dividend, as it saw revenue rise in the half year to end-September.
Vodafone also announced plans to launch residential broadband services in the UK in spring 2015 and is planning to use the infrastructure it acquired with Cable & Wireless Worldwide to launch these UK services.
Vodafone now expects earnings before interest, tax, depreciation and amortisation for the current financial year, ending March 2015, to be between GBP11.6 billion and GBP11.9 billion, and free cash flow to be positive after all capital expenses, excluding its acquisition of Grupo Corporative Ono SA in March.
At the time of its full-year results in May, the company had guided an EBITDA range between GBP11.4 billion and GBP11.9 billion for the year.
The company raised its interim dividend to 3.60 pence, up from 3.53 pence in the previous year.
Vodafone posted a pretax profit of GBP406 million for the half year, down from GBP1.51 billion a year before, as revenue rose to GBP20.75 billion from GBP19.06 billion, due to a big uptick in administrative costs, including a GBP637 million charge for the amortisation of its acquired customer base and brand intangible assets.
Revenue includes the acquisition of Kabel Deutschland, Ono, and the consolidation of 100% of Vodafone Italy. On an adjusted basis, excluding the amortisation charge, Vodafone posted an adjusted operating profit of GBP1.8 billion, down from GBP2.5 billion a year before, due to the integration Kabel Deutschland and the consolidation of Vodafone Italy.
Stripping out acquisitions and at constant currency, group service revenue fell 2.8%, with a 6.5% fall in Europe as growing demand for 4G services was offset by challenging competitive and macroeconomic pressures, and a 5.7% rise in Africa, the Middle East and Asia Pacific region.
The company said organic service revenue had reduced 1.5% in the second quarter, compared to a 4.2% fall in the first quarter, as its commercial performance improved and it saw a lower impact from mobile termination rate cuts.
The company added 3.9 million customers to its Vodafone Red plans; it launched Vodafone Red across India in its second quarter, taking the number of markets in which these mobile packages are available to 21. Vodafone said its transition from a predominantly mobile company to a "unified communications provider" is well advanced, with a fixed broadband customer base of 11.2 million.
Vodafone said that it had traded in line with expectations overall in its first half, but noted that competitive, macroeconomic and regulatory pressures continued, particularly in Europe.
It said it was seeing "some signs of stabilisation" in its commercial performance and operating trends, and some early benefits from its GBP19 billion Project Spring investment programme. The company said it was "not yet half way through" the investment programme, and its mobile network deployment is 40% complete.
Vodafone said it expects its investments to lead to further improvements in its network performance, and "customer perception" in the coming quarters, which it hopes will boost average revenue per user, and help customer churn in the medium term.
Shares in Vodafone are trading up 4.8% at 217.80 pence Tuesday morning, the top gainer in the FTSE 100.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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