Vodafone reports net loss of $6.7 billion in FY17 on ailing Indian unit
Facing cut-throat competition in India, it has agreed to merge its operations with Idea Cellular.business Updated: May 16, 2017 12:31 IST
Vodafone, the world’s second biggest mobile operator, reported a 6.1 billion euro ($6.71 billion) loss for the year to end-March, dragged down by the troubled Indian unit it is spinning off.
Seeking to reassure investors about the future however, the group forecast growth in earnings and a jump in free cash flow for the current year, driven by stablilising average revenue from its contract customers and lower spending.
It predicted a rise in organic adjusted core earnings growth of between 4 and 8% and free cash flow of about 5 billion euros, up from 4.1 billion euros in the previous year.
“We expect to sustain our momentum in the coming financial year, generating free cash flow of around 5.0 billion euros,” Chief Executive Vittorio Colao said on Tuesday.
“Our confidence in the outlook is demonstrated by another 2% increase in our dividend.”
The forecast growth in free cash flow this year, which will come as the company reduces investment in its network following its Project Spring upgrade, is ahead of analysts’ predictions of 4.66 billion euros.
Vodafone’s organic service revenue growth slowed to 1.5% in the final quarter from 2.1% in the third, due to regulatory headwinds in Europe that analysts say will ease in the year ahead.
Organic service revenue in Europe grew by just 0.1% in the quarter, while Africa, Middle East and Asia Pacific grew 6.8%, it said.
Facing cut-throat competition in India, it has agreed to merge its operations with Idea Cellular.