Vodafone cuts full-year forecasts as climate worsens

Vodafone reported a 2.6% decline in adjusted earnings in its first six months, which it blamed on commercial underperformance in Germany, its biggest market, and a one-off legal settlement in Italy in the prior year.

Vodafone cut its full-year free cash flow forecast by 200 million euros on Tuesday and said earnings would come in towards the bottom of its range, reflecting a worsening global macroeconomic climate and higher energy costs.

The mobile phone operator said free cash flow would be around 5.1 billion euros ($5.3 billion), down from previous guidance of 5.3 billion, and adjusted core earnings would be between 15.0 and 15.2 billion euros, down from between 15.0 and 15.5 billion euros. Chief Executive Nick Read said Vodafone was delivering a resilient performance in the context of a challenging macroeconomic environment.

"We are taking a number of steps to mitigate the economic backdrop of high energy costs and rising inflation," he said, adding that these included price increases across Europe. Vodafone reported a 2.6% decline in adjusted earnings in its first six months, which it blamed on commercial underperformance in Germany, its biggest market, and a one-off legal settlement in Italy in the prior year. ($1 = 0.9666 euros)