Shares in Vodafone increased in value by almost 13 per cent yesterday on publication of better- than-expected half-year results which show a strong rise in earnings and revenues at the company.
The firm said profits before tax, goodwill and exceptional items rose by 41 per cent to £4.25 billion (€6.68 billion) in the six months to September 30th, compared to the first half of 2001.
Vodafone has around 450,000 Irish shareholders who received the stock when Eircom's mobile phone subsidiary, Eircell, was sold to the British mobile phone giant last year. A 35 per cent collapse in the firm's share price over the past 12 months has hit investors hard, many of whom were already nursing losses on Eircom.
Sir Christopher Gent, the firm's chief executive, said he hoped the results would prove the doubters wrong and see analysts begin to back the company once more.
The rise in Vodafone shares, which closed up 12.7 per cent on 109.4p in London, will be cold comfort for former Eircom shareholders. When Vodafone bought Eircell, Eircom shareholders received 0.9478 Vodafone shares for every two shares they held in the demerged Eircell.
At the time the Eircell sale was announced, Vodafone shares were trading at £2.45. Since then, they have dropped to 109.4p.
Yesterday's results concur with analyst expectations of pre-tax profits of £3.5-£3.6 billion, and helped the firm cut its pre-tax losses by 55 per cent to £4.37 billion, as the world's largest mobile operator took a hit of £6.84 billion to write down the balance-sheet value of companies bought during its expansion drive.
Revenue jumped by 67 per cent year-on-year to £14.9 billion, boosted by the inclusion of results from Japanese operator J-Phone and Japan Telecom following their acquisition by Vodafone.
Vodafone posted a loss per share after goodwill and amortisation of 6.36 pence for the six months to September 30th, significantly better than the 14.26 pence loss posted in March.
The performance helped Vodafone to reduce its net debt to £10.7 billion, down from £12 billion in March 2002.
The firm, which wants to buy French operator Cegetel, said success in France would boost earnings, but it cautioned that its second-half performance would fall short of the first half due to higher operational spending.
Delays in building next-generation networks in Europe pushed spending back. Full-year capital expenditure would be half a billion pounds less than expected at £5.5 billion and be about the same the following financial year.
Average revenue per user - the industry's preferred benchmark for success - made gains in three months since June, up £4 to £282 in Britain in the 12 months to the end of September, up €6 in Germany to €308 and steady at €345 in Italy.
