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Technology Stocks : Vodafone-Airtouch (NYSE: VOD) -- Ignore unavailable to you. Want to Upgrade?

To: MrGreenJeans who wrote (2810)	5/30/2000 7:45:00 AM
From: MrGreenJeans	Respond to of 3175

(COM) 30/05/00 06:00: OUTLOOK: Vodafone FY results to take back-seat to imminent Orange sale OUTLOOK: Vodafone FY results to take back-seat to imminent Orange sale LONDON (AFX) - Vodafone Airtouch PLC's full-year results will cap a year when the mobile phone group has transformed itself into one of the world's largest corporate entities, but most attention will focus on the anticipated 40 bln eur-plus sale of Orange PLC to France Telecom SA. Analysts expect pre-exceptional pretax profit before goodwill of between 2.15-2.37 bln stg. Comparisons with last year are difficult given the results will incorporate both Airtouch, a leading U.S. mobile communications provider, and German engineering and telecoms giant Mannesmann AG for the first time. The dividend is expected to rise to 1.4-1.5 pence from 1.27 pence. The results though will take a back-seat to what the company says about UK mobile phone operator Orange, which it has to sell for regulatory reasons, following its 110 bln stg takeover of Mannesmann. Vodafone had originally said it would float off Orange in the third quarter, but the attractions of a trade sale have grown as investors increasingly shy away from the TMT flotations. Analysts are also keen to get a clearer picture about how the group plans to fund the cost of third generation mobile phone licences in Europe - both of acquiring them and investing in building them out. They will also seek a steer on what the company intends to do with Mannesmann's fixed line businesses and when a partial flotation of the Verizon joint venture in the U.S may take place. Verizon was created when Vodafone agreed to merge its mobile interests in the U.S. with those of Bell Atlantic and GTE. Verizon serves 90 pct of the U.S. population and is 45 pct owned by Vodafone and could fetch around 150 bln usd. Vodafone has also inherited a hefty debt burden of over 15 bln stg following the takeovers of Airtouch and Mannesmann. "The numbers will provide a benchmark going forward but everyone will be looking for comfort that Vodafone's debt position is manageable and the company can afford the investment in infrastructure (for 3G licences)," said Teather & Greenwood analyst Steve Trowbridge. "We are looking for a forward-looking statement." "The key thing will be what the company says about Orange," said SG Securities analysts Jim McCafferty. "How much is it worth and what are they going to do with the funds." McCafferty is forecasting pre-exceptional pretax profit before goodwill of 2.274 bln stg and retains a strong buy on the stock. There are hopes Vodafone will announce the sale - or at least give an update - of Orange to France Telecom for more than 40 bln eur in cash and shares. France Telecom is thought to have raised over 20 bln stg to help fund a bid for Orange. Finland's Sonera Oy and Dutch telco KPN NV are also thought to be interested in buying Orange. A major sticking point for a trade sale remains the viewpoint of Orange chief executive Hans Snook and his management team, who have expressed their wish for Orange to be spun off from Vodafone and relisted in London. There has been talk the European Union would block any deal leaving Vodafone with an ongoing interest in its U.K. rival, however indirect, but the EU has said it is not opposed in principle to Vodafone accepting a bid for Orange in both and shares. As well as what's going on with Orange, Vodafone chief executive Chris Gent will be quizzed about what the group plans to do with Mannesmann's fixed line operations. There is talk that the group is lining up a 15 bln stg sale of Arcor in Germany and Infostrada SpA in Italy to find further cash. A decision to sell the businesses would mark a change to the strategy outlined during the 110 bln stg takeover of Mannesmann. At the time, Vodafone said it intended "to keep these fixed-line businesses separate under their current management and to maintain strategic flexibility to maximise their value, which may include an IPO." However the escalating cost of winning 3G licences has changed all that. In the last month Vodafone has shed over 30 pct of its value as the markets worried about the 3G costs and the stock got embroiled in the TMT fallout. In a note to clients earlier this week, Deutsche Bank analysts Chris Manso and Andrew Beale said Vodafone's estimated global proportionate liability for the new 3G licences is around 51 bln eur. Of this, they estimate that the licence cost in Germany will amount to 15-20 bln eur. The group won the largest licence open to incumbents for over 6 bln stg. "In our view, the move to higher investment levels is clearly negative for valuations and likely to act as a short-term dampener on returns, but it is no disaster," said the analysts, who are forecasting clean pretax profit before goodwill of 2.389 bln stand and retain a strong buy stance on the stock. The Deutsche Bank analysts lowered their discounted cash flow valuation on the stock to 465 pence from 525 pence, "primarily as a result of the UMTS licence costs." Vodafone's financing costs would be solved by the sale of Orange for mainly cash, the analysts said. If, after extensive lobbying from Orange, a demerger was required, Vodafone's asset sales, planned and possible IPOs "would result in an achievable, but tighter financing," the analysts said. However bringing TMT stocks to the market is no easy thing. On Thursday, Vodafone had to shelve its planned flotation of a 17 pct stake of Vodafone Pacific Pty Ltd, blaming the volatility in equity markets and particularly the telecoms sector. Gent will be asked about when the company intends to try again with the flotation. The company said it had decided not to launch its IPO due to "current market conditions and volatility in the global equity markets in general and the telecommunications and media sectors in particular." Vodafone is already selling Mannesmann's industrial arm Atecs for around 9.6 bln eur and is offloading its 7.5 pct stake in Cegetel of France, which could fetch up to 3 bln eur, analysts said. Mannesmann's 1 bln eur watch business is also said to be earmarked for disposal. pp/mrg

To: MrGreenJeans who wrote (2810)	5/30/2000 7:46:00 AM
From: MrGreenJeans	Read Replies (1) \| Respond to of 3175

COM) 30/05/00 07:49: Vodafone posts FY profit close to 2.5 bln stg Vodafone posts FY profit close to 2.5 bln stg LONDON (AFX) - Vodafone AirTouch PLC, the world's largest mobile phone company, reported full-year profits of almost 2.5 bln stg today, though most attention will focus on its 26.9 bln stg sale of Orange to France Telecom. In the year to March 31, Vodafone reported pretax profit, on a pre-exceptional and goodwill basis, of 2.474 bln stg against the previous year's 1.80 bln. Analysts were anticipating profit to be between 2.15-2.37 bln stg. The total dividend has been raised 5 pct to 1.335 pence from 1.272. Chris Gent, chief executive of Vodafone, said the results cap a year which more than quadrupled the size of the business. Over the year, the company bought Mannesmann AG for more than 100 bln stg and closed its deals with Airtouch and Bell Atlantic. He said the group's strategy is aimed at pursuing growth in three different ways, "accelerated customer growth, geographic expansion and the provision of new services to customers". The group's worldwide customer base at the end of March was 39.1 mln proportionate customers, 54 pct higher than the prior year. The total number of customers in ventures the group invests in or controls was 86.1 mln. The company said it is very well positioned technically, financially and managerially not only to enjoy the rapid growth still to come in mobile telephony but also to lead the way in multi-access internet service development, in the best markets in the world. The company also said that the proceeds from the Orange sale will put it in a strong financial position to bid for third generation mobile phone licences across Europe. Earlier this year the group bid over 6 bln stg to win the largest 3G licence open to incumbents in the UK. As part of the Orange sale, Vodafone will take a 9.9 pct stake in France Telecom, though it will not have any voting rights. Vodafone can sell the shares in the market, subject to a six-month lock-up period following completion. France Telecom has agreed to provide the Vodafone marketing support for such market sales. pp/ak