Vodafone Earnings Rise 24 Percent
LONDON (AP) -- Vodafone Group PLC [NYSE:VOD - news], the world's largest mobile phone company, Tuesday reported a 24 percent rise in earnings before taxes, depreciation, and one-time charges in the first half and expects further improvement for the full year.
Vodafone's acquisition of Germany's Mannesmann AG and its stake in the U.S. venture Verizon Wireless contributed to customer growth, although profit margins slipped in Britain and Germany, the company said.
The British phone group earned 3.28 billion pounds ($4.72 billion) before taxes, depreciation and one-time gain and losses in the six months ending Sept. 30, up from 2.66 billion pounds last year.
The result beat most analysts' expectations, and Vodafone shares surged 9 percent in midafternoon trading in London.
``The group continues to report strong increases in profitability in all its operating regions. In addition, we are particularly encouraged by the initial trends we are seeing with respect to mobile data and Internet usage,'' chief executive Chris Gent said in a statement.
Vodafone revenue grew 32 percent to 10.2 billion pounds ($14.7 billion) from 7.68 billion pounds in 1999.
Last year's figures included pro-forma results for Mannesmann, which Vodafone bought in April, and AirTouch Communications, which it took over last June.
However, analysts said comparisons with last year's figures are largely meaningless because the company has grown so quickly through acquisitions.
Takashi Saito, a fund manager for Nikko Global Asset Management, said Vodafone's results looked ``impressive'' but added that they benefitted from high growth in sales and customer base rather than from fatter profit margins.
Declining margins in Britain and Germany were a problem. Both businesses suffered from a sharp growth in subscribers that brought with it higher connection costs.
British profit margins fell to 30 percent from 33 percent last year, while margins in Germany dropped to 30 percent from 45 percent.
Gent said he expects margins in both countries to recover somewhat by the end of the fiscal year.
``There is no profit warning here,'' he said. ``We expect significant improvements.''
Vodafone added 12.2 million new customers during the latest six months to a total of 65.5 million compared to 42.3 million customers a year ago.
Vodafone's net debt load of 13.2 billion pounds ($19.0 billion) equaled a relatively small 85 percent of the group's market capitalization, after payment for third-generation mobile phone licenses in Britain, Germany and the Netherlands.
Gent said the group's strong finances would enable it to fund its existing operations while also paying to expand as takeover opportunities might arise. |
