Vodafone on Tuesday revised down its full-year cash flow and adjusted core earnings forecasts amid surging energy costs and a deteriorating performance in markets such as Germany, Italy and Spain.
Due to a “challenging macroeconomic environment”, Vodafone slashed its cash flow forecast by EUR 200 million to EUR 5.1 billion for the year that ends in March 2023.
“We are taking a number of steps to mitigate the economic backdrop of high energy costs and rising inflation,” Vodafone’s Chief Executive Officer Nick Read was quoted as saying by Reuters.
“First and perhaps most important, given the historical deflation in our sector, we’ve taken proactive price action throughout our European markets.”
The European mobile operator, which faces a EUR 300 million increase in its energy bill this year, expects to raise prices in 11 out of 12 markets amid record-high inflation.
The company also expects to reduce costs by EUR 1 billion in the upcoming 3 1/2 years, including a simplification of tariffs. The decision will probably affect jobs, but roles such as software engineers will still increase, according to the group’s CEO.
The company now forecasts adjusted core earnings within the range of EUR 15 billion to EUR 15.2 billion, compared with a prior forecast of EUR 15 billion to EUR 15.5 billion.