Vodafone lowers outlook as economic woes mount

Vodafone lowered its full-year cash flow forecast and lowered its earnings forecast on Tuesday, reflecting higher energy costs and deteriorating performance in Germany, Italy and Spain.

Hief Executive Nick Read said the European mobile operator is taking steps to navigate the “challenging macroeconomic environment” that has forced it to raise its cash flow forecast by 200 million euros to around 5.1 billion euros ($5.3 billion). ) to shorten.

The British group also said its core adjusted earnings would be between 15 and 15.2 billion euros, down from a previous target of 15 to 15.5 billion euros.

The market was already bearish on Vodafone’s prospects ahead of the half-year results, with cash flow consensus at €5.14 billion and core adjusted earnings at €15.11 billion.

“We are taking a number of steps to mitigate the economic backdrop of high energy costs and rising inflation,” Read said, adding that these included price hikes across Europe.

The group’s shares opened 3 percent lower.

Vodafone reported a 2.6 percent fall in adjusted profit for the first six months, which was attributed to commercial underperformance in Germany, its largest market, and a one-off legal battle in Italy the previous year.

Germany’s service revenue decline accelerated to minus 1.1 percent in the second quarter, from minus 0.5 percent in the first, mainly due to broadband subscriber losses.

In Italy and Spain, performance also deteriorated from quarter to quarter, driven by intense competition in the value segment of both countries’ mobile markets.

The UK, however, is a bright spot as services revenues rise following consumer price hikes and a return to growth in the business segment, it said.

Read takes steps to simplify Vodafone and accelerate growth. He has also tried to promote consolidation in Europe.

Last month, he struck a deal with Altice to build a $7 billion fiber optic network.

On Tuesday, he announced a new €1 billion cost savings target focused on further simplifying the group

https://www.independent.ie/business/world/vodafone-cuts-outlook-as-economic-woes-mount-42145049.html Vodafone lowers outlook as economic woes mount

Fry Electronics Team

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