Vodafone: Investors look for sell-off progress with minority holdings

Ahead of this week's first-half results from Vodafone, investors have already built up their hopes that the company will announce further steps forward in streamlining its portfolio of minority holdings around the world.

Driving this eagerness is the share price improvement (up 16 per cent) since Vodafone sold its 3.2 per cent holding in China Mobile for US$6.6 billion in September. Shareholders are now hoping for something similar with regard to Vodafone's holdings in the French operator SFR and Poland's Polkomtel.

One financial watcher, UniCredit analyst Thomas Friedrich, said, "Although we expect concrete progress in asset disposals only later this year or early next year, the strategy update [anticipated to be made with the H1 announcement] should increase confidence in further measures and thus have a positive effect."

However, most analysts believe that Vodafone will retain its 4.4 per cent stake in India's Bharti Airtel--because the stock is illiquid and hard to sell--as well as its most prized asset, a 45 per cent holding in Verizon Wireless.

Meanwhile, a poll of eight Vodafone pundits concluded that the company would report a first-half EITDA figure of £7.29 billion, down from £7.5 billion a year earlier, on revenue of £22.33 billion, slightly above the £21.8 billion posted in 2009.

Away from the strategy update and the H1 financial performance, investors and analysts will be looking for strong growth from the sale of data services, and how the company plans to keep this segment profitable despite the ongoing need for infrastructure Capex. Another key indicator will be signs of improvement in European markets including Spain, whose construction sector collapse has damaged Vodafone fortunes.

The company's latest results will be keenly compared with the better-than-expected trading figures recently unveiled by its peers including France Telecom Orange and KPN.

For more:
- see this Reuters article

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