Vodafone to reduce costs by another €600m-reports
Vodafone is this week poised to launch a new, amplified cost-cutting drive to soften the affect of the recession and significant contraction in consumer spending.
Vodafone CEO Vittorio Colao announced a year ago that he wanted to save €1.1 billion by 2011, which translated to a freeze on spending in Europe and slowdown in operational costs,
Vodafone’s interim results are due out on Tuesday, when Colao is expected to assuage investors with a new raft of cost-cutting measures and targets.
The FT reports that on top of Vodafone’s target of reducing operating expenses by €1.1 billion by March 2011, the goal might be increased to €1.6 billion.
Analysts at Vodafone broker, Citi, are expecting Vodafone to report €24.1 billion in revenue for the six months to September 30, and ebitda of €8.3 billion.
Vodafone’s core European businesses, such as the UK and Spain, are expected to report declining revenue and the group’s overall performance is due to be flattered by acquisitions and the sterling’s weakness against other currencies, notably the euro.
The analysts add that the results are also likely to reveal how much pressure Vodafone’s assets are under in emerging markets such as India, which represents 15% of Vodafone’s profit growth.
A Citi analyst told the Times that Colao is expected to warn that the 23% sales increase enjoyed last quarter in India is unlikely to be repeated in the short term.