Vodafone Group plc (LON:VOD) or Vodafone Group plc (ADR) (NASDAQ:VOD) shares are trading higher after the company offered an upbeat forecast for the current fiscal year 2018. The company suffered a loss of Euro 6.1 billion or $6.7 billion for the fiscal year ended March 2017. The telecom operator blamed it on the troubled Indian wing that it is spinning off.
However, Vodafone Group sees earnings growth and an increase in free cash flow for the current fiscal year that ends in March 2018. The company expressed its confidence that stabilizing average revenue from its contract customers apart from lower spending would enable it to achieve the targeted level. The telecom operator sees organic adjusted core EPS growth of 4 – 8 percent while free cash flow is predicted to increase to Euros 5 billion from 4.1 billion in the preceding year.
Reuters reported quote Vodafone CEO, Vittorio Colao, as saying, “We expect to sustain our momentum in the coming financial year, generating free cash flow of around 5.0 billion euros. Our confidence in the outlook is demonstrated by another 2 percent increase in our dividend.”
The company’s organic service revenue witnessed a slower growth of 1.5 percent in the fourth quarter while it could achieve 2.1 percent in the third quarter. Analysts have blamed it on regulatory headwinds in Europe, which would ease in the upcoming period. Organic service revenue grew just 10 basis points in Europe in the fourth quarter whereas the growth rate was 6.8 percent from Africa, Middle East and Asia Pacific. The company has agreed to merge its operations with domestic firm, Idea Cellular, to face heat created by Reliance Jio Infocomm that unleashed a price war on mobile data usage.
At time of writing this, Vodafone shares are trading up 4.01 percent in LSE while the stock advanced 3.9 percent in Nasdaq’s pre-market trading.