Holding it together

19 May 2009 By Una Galani Follow @ugalani

Results from the world s largest mobile operator show recessionary scars, with £5.9bn of writedowns scattered across its empire. There could be more slips. But Vodafone s share price gives little credit to its emergingmarkets growth prospects and scope for costcutting.

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Vodafone on May 19 said that it would accelerate its existing costcutting programme and increased full year impairment charges to £5.9bn due to problems in Spain, Turkey and Ghana.

The world's largest mobile operator reported a 15.6% rise in fullyear revenues to £41bn, with ebitda up 10% to £14.5bn. Free cash flow before impairment charges was £5.7bn in line with its own guidance and consensus analyst forecasts.

In November, Vodafone incurred a £1.7bn impairment charge relating to Turkey. At the same time, Vodafone outlined plans to reduce £1bn costs by 2011 with the aim of achieving half by 2010. The mobile operator now aims to achieve 65% of its target by 2010.

Vodafone forecast 2010 adjusted operating profit between £11bn£11.8bn and free cash flow in the range of £6bn£6.bn. It declined to give revenue guidance.

Vodafone shares traded down 1% in early trading following its results announcement.

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