Vodafone CEO's Departure Overshadows Earnings, Revenue Beat -- Earnings Review
15 Mayo 2018 - 07:18AM
Noticias Dow Jones
By Adria Calatayud
Vodafone Group PLC (VOD.LN), the world's second-largest wireless
carrier by subscribers, reported earnings for fiscal 2018 on
Tuesday. Here's what you need to know:
EARNINGS: The telecommunications group made adjusted earnings
before interest, taxes, depreciation and amortization--its
preferred profit measure--for the year ended March 31 of 14.74
billion euros ($17.63 billion), up 4.2% from EUR14.15 billion in
fiscal 2017. This was ahead of analyst forecasts of EUR14.49
billion, according to a consensus based on 22 estimates provided by
FactSet.
Adjusted Ebitda grew 12% organically, exceeding the company's
guidance for organic growth of around 10% on year. Vodafone swung
to net profit of EUR2.44 billion from a loss of EUR6.30 billion a
year earlier--when it was hurt by a big write-down in India.
REVENUE: Vodafone generated full-year revenue of EUR46.57
billion, down 2.2% from EUR47.63 billion in the prior fiscal year
but topping a FactSet-provided forecast of EUR46.17 billion. The
company attributed its revenue decline to the deconsolidation of
its Netherlands operations and to foreign-exchange movements.
WHAT WE WATCHED:
CEO SUCCESSION: Vodafone said Chief Executive Vittorio Colao is
set to leave the company on Oct. 1 after a decade at the helm.
Chief Financial Officer Nick Read will succeed him, and Deputy CFO
Margherita Della Valle will then take over the CFO role on July 27,
when Mr. Read will become CEO-designate. Vodafone shares fell in
morning trade and were last down 3.3%. Interactive Investor's
Richard Hunter said investors seemed unsettled by the change of
CEO.
LIBERTY GLOBAL DEAL: Vodafone agreed to buy Liberty Global PLC's
(LBTYA) assets in continental Europe on May 9, a potentially
transformative deal that capped Mr. Colao's tenure.
"We announced last week the acquisition of Liberty Global's
cable assets in Germany and central and eastern Europe,
transforming the Group into Europe's leading next generation
network owner and a truly converged challenger to dominant
incumbents," Mr. Colao said.
According to Hargreaves Lansdown, the Liberty deal will come
with significant savings and cross-selling opportunities which will
open up growth potential.
SERVICE REVENUE: Vodafone's revenue from selling telecom
services--a key revenue metric for the company--grew 1.4%
organically in the fourth quarter of fiscal 2018 compared with an
increase of 1.1% in the third quarter. Analysts at Jefferies said
this was ahead of consensus estimates. For the full year, organic
service revenue rose 1.6%.
FY 2019 GUIDANCE: The company guided for adjusted Ebitda organic
growth between 1% and 5%, amid mounting pressures in key European
markets.
"We expect to sustain our profit growth in the year ahead,
despite the arrival of a new entrant in Italy and competitive
pressure in Spain, supported by the third year in a row of lower
net operating costs," Mr. Colao said.
According to AJ Bell, Vodafone's guidance shows that Mr. Read
will have limited growth drivers when he takes the reigns. "After
all, Vodafone is an established player in a mature market and has
few levers to pull for growth," AJ Bell's Russ Mould said.
Write to Adria Calatayud at
adria.calatayudvaello@dowjones.com
(END) Dow Jones Newswires
May 15, 2018 08:03 ET (12:03 GMT)
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