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Vodafone first-half loss narrows
LONDON, England -- Vodafone, Europe's largest mobile phone operator, on Tuesday said first-half losses narrowed and predicted revenue in the next six months would be better than the previous year. Earnings before deductions rose 30 percent to £6.203 billion ($9.9 billion), ahead of expectations. The goup had a first-half net loss of £4.34 billion, or 6.41 pence a share, compared to £9.74 billion, or 14.41 pence a share, a year earlier. Mobile revenue climbed 15 percent to £15.459 billion in the six months to September 30.
"We are very pleased with the figures. It's the fruit of a lot of hard work and the programmes we've been bringing into the company," said Chief Executive Chris Gent. Gent said he expected a better second half this year than last in 2001, due to the ongoing growth of its mobile revenue. But he cautioned that the next six months would not be as strong as the first half due to increased spending. "These are exciting results. What we don't want people to do is take the first half, double it and add a bit, because that would be wrong," he said in a conference call. However, Gent said that capital expenditure would exceed £5.5 billion ($8.75 billion) this year and hold steady next year. Mark James, a telecommunications analysts at Nomura International, told CNN that while Vodafone's growth in the U.S. market has been weak, the group's first-half earnings have been supported by a strong performance by its Japanese mobile unit, J-Phone. "The turnaround in J-Phone has been very impressive," he said, but added: "I don't think they have the ability to add much more profitability in Japan." J-Phone is the wireless unit of Japan Telecom Holdings, which is two-thirds owned by Vodafone. Japan Telecom, the country's third largest telecom group, reported improved earnings on Tuesday in Tokyo. (Full story) Vodafone, which has more than 100 million subscribers in 28 countries, is in the middle of a battle with Vivendi Universal to gain control of Cegetel, their French telecoms joint venture. Last week it renewed a 6.77 billion euro ($6.74 billion) cash offer for Vivendi's 44 percent stake in Cegetel. Vodafone has also given Vivendi, which currently controls Cegetel, until December 10 to counter part or all of its agreed 6.3 billion euro bid for 41 percent of Cegetel held by two other shareholders -- BT Group and SBC Communications. "They have very few holes to fill, France is one of them," said Nomura's James. "But I would prefer to see them give back more cash to shareholders." Shares in Vodafone (VOD) were up 8.6 percent to 107 pence in mid-morning trading on Tuesday in London. The stock has lost almost 40 percnet of it value in the past 12 months.
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