LONDON: Mobile operator Vodafone on Tuesday raised its free cash flow forecast for this year after announcing a 6.5% growth in its adjusted basic profit in the first half, thanks to a good performance in Germany, its most big market.
Shares of Vodafone, which have fallen 15% year-to-date, rose 5% in early trades to 118 pence.
The British company raised the floor of its annual profit forecast to 15.2 billion euros ($ 17.3 billion) from 15.0 billion euros, the ceiling remaining at 15.4 billion, and increased its free cash flow target of at least 5.3 billion euros against at least 5.2 billion.
Managing Director Nick Read said Vodafone had “a strong business momentum”.
“Our strengthened performance in Africa and Europe puts us on track to be at the top of our forecasts for this year, as well as firmly in our medium-term financial ambitions,” he said.
Vodafone said its total revenue increased 5% to 22.5 billion euros in the six months ended September, thanks to growth in service revenues in Europe and Africa and a resumption of handset sales following the disruption of COVID-19 the previous year.
Adjusted core income stood at € 7.6 billion, with growth supported by a 0.7 point margin increase.
Analysts are likely to push the forecast higher. They expected Vodafone to report a profit of € 15.2 billion this year and generate cash flow of € 5.23 billion, according to a consensus established by the company.
Organic services revenue grew 1.2% in Germany and Britain, but fell 2.5% in Italy and 0.6% in Spain after first quarter growth fell. is evaporated in the second.
Vodafone said it has stabilized its financial performance in the highly competitive Spanish market.
He said he was “actively pursuing” opportunities in the country, including strengthening strategic network partnerships and market consolidation.