Rising inflation and a tough economic backdrop will hold back Vodafone's earnings this year and could complicate its dealmaking efforts, the mobile phone group warned today.
The company, which has a new Middle Eastern shareholder, said it expected adjusted core earnings of €15-15.5 billion this financial year, below analysts' average forecast of €15.57 billion.
That came as the company reported a 5% rise in adjusted core earnings to €15.2 billion for the year to the end of March that was at the bottom of its guidance range.
"The current macroeconomic climate presents specific challenges, particularly inflation, and is likely to impact our financial performance in the year ahead," the company said.
Shares in Vodafone fell 3% today, wiping out gains made yesterday, the first day of trading after UAE-based telecoms company e& said it had bought a $4.4 billion stake in the UK group.
Vodafone chief executive Nick Read said he was focused on improving its performance in Germany, pursing opportunities for Vantage Towers, the infrastructure business spun out last year, and "strengthening its markets positions in Europe".
In February, he said he was looking for deals in Spain, Italy, Britain and Portugal.
Since then, Vodafone has rejected a $13 billion approach from France's Iliad and Apax Partners for its Italian business, and has seen two of its rivals in Spain - Orange and MasMovil - enter exclusive merger talks.
In Britain, however, Vodafone is in talks with smaller rival Three, owned by Hutchison, according to reports.
"There are opportunities across four markets that we are pursuing, and we're engaged with a number of players in those opportunities," Read said today.
"Clearly it's a more challenging macroeconomic backdrop, and so that will have a factor on some of the players' decisions, but overall we continue to make good progress on those discussions."
He declined to give more details, but he stressed there would be no fire sales.
Read said he had a "very good" conversation with e&'s chief executive Hatem Dowidar on Saturday. "He was fully supportive of our strategy, both organically and the actions we are taking on the portfolio," he said.
Vodafone Ireland's fourth quarter service revenue up by 6.4%
Vodafone Ireland said its service revenue for its fiscal fourth quarter rose by 6.4% to €201m on the back of continued growth in mobile contract and fixed broadband.
The company said its total fixed broadband customer base increased by 4.6% year-on-year to over 313,000, while its total mobile customer base increased by 3.7% year-on-year.
73,700 additional contract and prepaid customers joining Vodafone Ireland's network during the three month period.
Increasing numbers of customers also took advantage of Vodafone's unlimited mobile data offering, with a 35.2% increase in data usage year on year to over 67,000 terabytes.
During the quarter, Vodafone Ireland agreed a new partnership with Dairygold to install the cloud-based platform MyFarmWeb at the 280-hectare Elm Hill Farm run by Cork farmer Sean O'Sullivan as part of a wider EU pilot project.
Through the use of Internet of ThingsSensors, MyFarmWeb is designed to save time, costs and deliver improved farming practices.
Vodafone also extended its partnership deal with the Irish Manufacturing Research Centre (IMR), which is building on the power of the first standalone 5G mobile private network (MPN) Vodafone installed at the facility last year.
It also announced a strategic partnership with Irish start-up ApisProtect to provide advanced IoT technology, optimising its hive monitoring system in the field and helping the survival of bees.
"As we close out the last quarter and year for Vodafone Ireland, we are delighted to see continued growth in our mobile and fixed broadband services, with both experiencing positive increases, " Anne O’Leary, CEO of Vodafone Ireland, said.
"We look forward to not only growing our network in the year ahead, but building on our policies and partnerships, to further support the creation of a better future for all," she added.
