Vodafone Swings to Profit and Expands Capital Expenditure Plan

Nigel Thomas
12 Nov, 2013
New York City

Vodafone Group swings to a net profit and increase its capital expenditure plan as the telecom carrier deepens its roots in emerging markets. Vodafone plans to spend additional

Vodafone Group Plc rose 0.7% to 228.95 pence after the U.K.-based mobile phone company reported group revenue in the first-half ending in September rose 2.5% to £19.1 billion from £18.6 million a year ago.

Net for the period swung to a profit to £18.01 billion compared to a loss of £1.89 billion and diluted earnings per share swung to 31.97 pence from a loss of 8.81 pence a year earlier.

On organic basis the company earned £1.5 billion in the period before taxes.

Vodafone said group revenue in the first-half climbed 1.2% to £22.03 billion. However, second-quarter organic service revenues declined 4.9% on 15.5% revenue plunge in Southern Europe.

Operating profit after adjusting for one-time items declined 8.3% to £5.71 billion and the results in the first-half included five months of contribution from Verizon Wireless compared to six months in the period a year ago.

Vodafone announced an interim dividend of 3.53 pence a share, an increase of 8% from a year ago. With this, the total annual dividend is expected to increase to 11 pence a share.

Vodafone is looking to expand in fast growing regions of the world like India and Turkey but most of its profits are in slow growth and competitive markets in Europe.

Vittorio Colao, Chief executive, said the group has filed to purchase remaining minority stake in its Indian subsidiary.

Vodafone said it plans to spend £7 billion over the next two fiscal years focus on the expansion of third and fourth generation network capacity and fiber optic cable rollout.

In Europe, the telecom carrier plans to spend £3 billion to expand its mobile network to meet demand for faster data connections originating from tablets and smartphones.

Vodafone in September sold its 45% stake in Verizon Wireless to the U.S. based Verizon Wireless Communications Inc for $130 billion.