Tuesday, May 17, 2011
Southern Europe weighs on Vodafone results
Vodafone Group reported robust numbers for the year to 31 March 2011, although weakness in Southern Europe is continuing to take its toll. It said that organic service revenue growth improved, with a strong result from emerging markets and signs of renewed growth in some parts of Europe. However, it also acknowledged that markets remain competitive and that the economic environment, particularly across southern Europe, is “challenging.” For the year, Vodafone reported a net profit of £7.87 billion, down from £8.62 billion, on revenue of £45.88 billion, up 3.2 percent. It also recorded an impairment charge of £6.1 billion related to its businesses in Spain, Greece, Portugal, Italy and Ireland.
The company noted “strong performance in key revenue growth areas,” with data increasing by 26.4 percent, emerging markets up 11.8 percent, fixed sales growing by 5.2 percent, and Europe Enterprise up 0.5 percent. The company also noted there had been a “successful drive to increase smartphone penetration in Europe,” which climbed to 18.7 percent from 11.6 percent year-on-year. Data now represents 12 percent of Group service revenue. It also said that 48 percent of its European smartphone customers now take some form of data plan – although this indicates there is still potential for growth, as more than half still do not.
Vodafone said its core European business exhibited “two different trends:” the more stable northern European economies of Germany, the UK and the Netherlands delivered service revenue growth of 2.7 percent, while the rest of Europe was down 2.9 percent, as a result of the ongoing macroeconomic issues. European data revenue growth continued to be strong, but was offset by continued voice price declines and cuts to mobile termination rates. It said that organic service revenue growth in emerging markets was 11.8 percent, driven by growth in India (16.2 percent), South Africa (5 percent) and Turkey (28.9 percent). The company’s share of profits at Verizon Wireless increased by 8.5 percent to £4.6 billion. It noted increased costs in this business, due to the launch of Apple’s iPhone.
Looking forward, Vodafone expects its adjusted operating profit for 2012 to be in the £11 billion–£11.8 billion range, compared with £11.82 billion in the period to March 2011, reflecting the loss of a £0.5 billion share of the profits from SFR. In addition to continued challenges in southern Europe, the company also noted that it expects further regulated cuts to termination rates to have a negative impact. Vittorio Colao (pictured), Group Chief Executive of Vodafone, said that “continuing network investment is an important differentiator for Vodafone, improving the customer experience and giving us leadership in smartphone penetration and in customer take-up of data plans. We enter the new financial year well positioned to deliver further value to our shareholders.”
The company noted “strong performance in key revenue growth areas,” with data increasing by 26.4 percent, emerging markets up 11.8 percent, fixed sales growing by 5.2 percent, and Europe Enterprise up 0.5 percent. The company also noted there had been a “successful drive to increase smartphone penetration in Europe,” which climbed to 18.7 percent from 11.6 percent year-on-year. Data now represents 12 percent of Group service revenue. It also said that 48 percent of its European smartphone customers now take some form of data plan – although this indicates there is still potential for growth, as more than half still do not.
Vodafone said its core European business exhibited “two different trends:” the more stable northern European economies of Germany, the UK and the Netherlands delivered service revenue growth of 2.7 percent, while the rest of Europe was down 2.9 percent, as a result of the ongoing macroeconomic issues. European data revenue growth continued to be strong, but was offset by continued voice price declines and cuts to mobile termination rates. It said that organic service revenue growth in emerging markets was 11.8 percent, driven by growth in India (16.2 percent), South Africa (5 percent) and Turkey (28.9 percent). The company’s share of profits at Verizon Wireless increased by 8.5 percent to £4.6 billion. It noted increased costs in this business, due to the launch of Apple’s iPhone.
Looking forward, Vodafone expects its adjusted operating profit for 2012 to be in the £11 billion–£11.8 billion range, compared with £11.82 billion in the period to March 2011, reflecting the loss of a £0.5 billion share of the profits from SFR. In addition to continued challenges in southern Europe, the company also noted that it expects further regulated cuts to termination rates to have a negative impact. Vittorio Colao (pictured), Group Chief Executive of Vodafone, said that “continuing network investment is an important differentiator for Vodafone, improving the customer experience and giving us leadership in smartphone penetration and in customer take-up of data plans. We enter the new financial year well positioned to deliver further value to our shareholders.”
Labels: Southern-Europe-weighs-on-Vodafone-results
# posted by faburous @ 3:20 AM 
