Vodafone increasingly confident after resilient first half

Vodafone, the world’s second largest mobile operator, revised its earnings outlook on Monday, saying it was growing more confident after a ‘resilient’ first half, despite the impact of COVID-19 clouding its momentum underlying.

Excluding roaming, service revenue grew 1.5%, said the company, helped by increasing its European contract customer base to 65 million and broadband customers to 25, 4 million, and unlimited variable-speed mobile data plans in nine markets.

Managing Director Nick Read said the results underscored “increased confidence” in the outlook and demonstrated progress in increasing customer loyalty, growing its fixed broadband base, and delivering 5G efficiently through the network sharing.

Overall I’m happy with the pace and performance against our plan, he told reporters on Monday.

Vodafone has quantified its adjusted basic income target for the year at the end of March: 14.4 billion euros to 14.6 billion euros, against 14.5 billion euros the previous year.

He had previously said they would be “flat to slightly lower”. Analysts predicted 14.37 billion.

Shares rose 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 on Monday its free cash flow forecast for the full year of at least $ 5 billion. euros before spectrum and restructuring costs.

Read said more details of 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 important work with Tef (Telefonica) and we intend to eventually transfer our stake in CTIL to Vantage Towers, ideally before the IPO,” he said.

For the half-year ended at the end of September, Vodafone published current income of 7.0 billion euros, down 1.9%, on a 2.3% drop in the group’s turnover to 21.4 billion euros.