Vodafone H1 Profit Rises; Backs FY10 Adj. Operating Profit View

11/10/2009 7:00 AM ET

(RTTNews) - British mobile network operator Vodafone Group Plc (VOD: News ,VOD.L: News ) Tuesday reported higher profit for six months ended on September 30, driven by higher revenues, which reflected the favorable impacts of exchange rate movements, lower tax and merger and acquisition activity. The company also lifted its interim dividend and confirmed its full-year 2010 adjusted operating profit outlook.

The company's profit for the period attributable to equity shareholders was GBP 4.82 billion or 9.14 pence per share, compared to GBP 2.14 billion or 4.02 pence per share a year ago. Profit for the period rose to GBP 4.80 billion from GBP 2.17 billion in the previous year.

The company's profit before taxation rose to GBP 5.75 billion from GBP 3.31 billion in the previous year. Adjusted effective tax rate was 21.5%, down from 26.5% last year.

On an adjusted basis, profit attributable to equity shareholders was GBP 4.58 billion, higher than last year's GBP 3.99 billion. Adjusted earnings per share grew 16% to 8.72 pence from 7.52 pence last year, with substantially all of the increase arising from movements in exchange rates.

For the period, adjusted operating profit increased 2.4% to GBP 5.9 billion with a positive contribution from Verizon Wireless and foreign currency benefits offsetting lower profit in Europe.

The company's revenue for the first-half was GBP 21.76 billion, up 9.3% from GBP 19.90 billion in the prior year, with favourable exchange rate movements contributing 7.9 percentage points and the benefit of merger and acquisition activity contributing 4.4 percentage points to revenue growth. Organic revenue declined 3% in the period. Total service revenue reached GBP 20.47 billion, an increase of 9.8% from GBP 18.64 billion in the prior-year period. Service revenue dropped 2.6% on an organic basis.

Voice revenue totaled GBP 13.98 billion, up from GBP 13.27 billion a year ago. Messaging revenue rose to GBP 2.31 billion from GBP 2.17 billion in the previous year. Group data revenue was up 35.2% for the period to GBP 1.99 billion. On an organic basis, data revenue rose 19.8%. Fixed line revenue increased to GBP 1.58 billion from GBP 1.24 billion in the prior-year period.

Geographically, Europe posted revenue growth of 3%, benefiting from foreign exchange. Organic service revenue was down 4.5% reflecting the economic and competitive environment. Data grew 17.8% and fixed line grew 7.3%, but were offset by ongoing price pressures, the company noted. Europe enterprise revenue was down 5.4% during the period, due to the impact of higher unemployment, lower business travel and aggressive price competition across the region.