Mobile phone giant Vodafone's (VOD) hefty loss reflects a £5.9bn impairment charge taken against its struggling Spanish and Italian operations. But there was a bumper £2.4bn dividend from 45 per cent owned Verizon Wireless - management will use that to fund a £1.5bn share buy-back programme.
Indeed, cash profits attributable to Vodafone from from US operator Verizon Wireless rose 14 per cent in the period to £4.49bn - which helped adjusted group operating profit rise 2.2 per cent to £6.2bn. The emerging markets businesses were also relatively strong - particularly Turkey - but sharp falls in southern Europe more than wiped out those gains. Spain's revenue slumped 22 per cent £1.97bn, while Italy's shrank 16 per cent to £2.43bn. The German and UK performances were also lacklustre.
Progress at off-setting declines in voice and messaging revenues looks slow, too. Mobile data revenue climbed just 4 per cent to £1.64bn during the second quarter and voice and messaging, combined, saw revenue slump 14 per cent to £6.87bn. Vodafone expects full-year free cash flow to be in the lower end of the £5.3bn-£5.8bn range indicated in May.
Broker Bernstein forecasts a full-year adjusted EPS of 15.25p (14.91p in 2012), rising to 15.79p in 2014.
VODAFONE (VOD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 160p | MARKET VALUE: | £78.6bn | |
| TOUCH: | 159.8-159.9 | 12-MONTH HIGH: | 192p | LOW: 158p |
| DIVIDEND YIELD: | 6.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 141p* | NET DEBT: | 37% | |
| Half-yearto 30 Sep | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 23.5 | 8.01 | 13.1 | 3.05 |
| 2012 | 21.8 | -0.49 | -4.01 | 3.27 |
| % change | -7 | - | - | +7 |
Ex-div: 21 Nov Payment: 6 Feb *Includes intangible assets of £50.7bn, or 103p a share | ||||
