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Weak pound helps Vodafone dial up profit

Currency balances books

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Vodafone Group grew revenues by 14.3 per cent to £10.47bn for the quarter ended 31 December 2008, helped by the weak pound and has jacked up its outlook for the full year

Stripping out the benefits of currency movements and the benefits of an Indian acquistion Vodafone's revenue actually fell one per cent while service revenue dipped 0.3 per cent.

Pro forma growth remains positive despite the economic problems. The group remains focussed on mobile data, enterprise and fixed broadband - organic data revenue growth was up 25.3 per cent in the period.

Vodafone has made good progress on cost cutting - removing £500m from annual costs already and on target to have cut £1bn by 2011. The company has issued £2.9bn in corporate bonds since 30 September 2008 and refinanced another £3.3bn, it still has $9.1bn in undrawn committed credit.

The currency changes have prompted the firm to restate its guidance for the full year. It had previously forecast full year revenues of £38.8bn to £39.7bn to £40.6bn to £41.5bn. Adjusted operating profit, previously expected to be £11.0bn to £11.5bn is now expected to come in at £11.5 to £12.0.

Exchange rates have also had an impact on total debt, which is held in a mix of currencies. Net debt on 30 September 2008, using January 2009's exchange rates, would add £5.7bn to Vodafone's £27.8bn debt pile.

Churn for the period was 34.6 per cent in the UK, 28.8 per cent in Germany and 27.2 per cent in Italy.

Vodafone had 289m mobile customers at the end of December 2008, up 9.5m on the quarter.

Arpu was £21.5 in the UK, €16.2 in Germany and €35.3 in the Netherlands.

Vodafone shares are up slightly on the news. ®

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