Vodafone raises guidance to 13 billion euros after Safaricom deal

Vodafone Group Plc raised its full-year guidance on Monday to reflect its Safaricom acquisition, saying core earnings should land at the upper end of a new 13.0 billion to 13.3 billion euro range after a strong start to the financial year.

"We have had a strong start to the year, with growth across every segment," the London-based telecom operator said in a statement. Organic service revenue rose 5.2 percent in the first quarter, accelerating from 5.1 percent in the final quarter of the prior year.

Reported service revenue climbed 9.8 percent to 8.6 billion euros, while total revenue rose 9.7 percent to 10.3 billion euros, helped by the merger of Vodafone's UK business with Three. Underlying earnings before interest, taxes, depreciation, and amortization increased 6.7 percent to 2.9 billion euros, or 6.2 percent on an organic basis. The company also guided for adjusted free cash flow of 2.6 billion to 2.9 billion euros for the year ending March 2027.

The guidance raise signals management's confidence that the Safaricom deal will deliver sustained growth in African markets. Vodafone shares rose 3.6 percent on the FTSE 100 on Monday, leading the index higher. Investors will watch the next quarterly update for evidence of margin expansion from the UK merger and further synergies from the Safaricom integration.

This article is for informational purposes only and does not constitute investment advice.