LONDON: Vodafone upgraded its financial forecasts after it reported better than expected performance in the first half of the year, assisted by a £100m compensation cheque from BT’s network business Openreach.
The telecoms giant said it now expects organic earnings before interest, tax, depreciation and amortisation to increase by around 10pc to as high as €14.95bn. That compares with its earlier forecast of 8pc growth to a maximum of €14.5bn.
The boost sent Vodafone shares climbing more than 4pc in early trading.
The company received a £100m settlement from Openreach after Ofcom found it had avoided paying compensation for installation delays. Mobile operators rely on fixed lines provided by Openreach to connect their masts.
Vodafone’ outlook for the year was also improved by delays in Italy where a new market entrant, Iliad, had been due to intensify competition.
The European ban on roaming fees had less of an impact that the company feared and service revenues across the continent were stronger than expected.
Chief executive Vittorio Colao said: “It is the first time we have raised Vodafone’s organic Ebitda guidance in recent history.”
Organic service revenues, the measure of Vodafone’s core sales, were up 1.7pc in the first half to €20.6bn. There was a slowdown in the second quarter driven by the company’s African and Middle East operations. In Europe momentum was maintained, however.
On a statutory basis revenues were down 4pc to 23.1bn as Vodafone deconsolidated its Dutch business to merge it with Liberty Global’s.
The were signs of improvement in Vodafone’s UK business, which has struggled in recent years amid intense competition and a botched billing system upgrade that caused chaos for customers.