Vodafone sells SoftBank interests as first-half profit soars
British mobile phone giant Vodafone said on Tuesday that it had agreed to sell its SoftBank interests to the Japanese telecoms firm for 5.0 billion dollars, as it posted soaring first-half profits.
Vodafone said in a statement it would sell the interests for 3.1 billion pounds, or 412.5 billion yen, after gaining the assets in 2006 following the sale of Vodafone Japan to SoftBank Corp.
"Vodafone today announces that it has agreed to sell to SoftBank Corp. of Japan its interests which were originally received as part of the proceeds from the sale of Vodafone Japan in 2006, for a total consideration of 412.5 billion yen," it said in a statement issued alongside its interim results.
Under the new agreement, Vodafone will sell its interest in loan notes and preferred stock and share acquisition rights in two SoftBank subsidiaries.
Vodafone said the deal was part of its new strategy to tap further into its operations in Europe, Africa and India, and followed the sale of its 3.2-percent stake in China Mobile for 4.3 billion pounds in September.
The cash, which will be received in two tranches in December 2010 and April 2012, will initially be used to cut debt.
"We will actively manage our investment portfolio and seek out value enhancing opportunities -- wherever possible -- as we have done with the sale of the group's investment in China Mobile and in SoftBank which was announced today," said chief executive Vittorio Colao in the results statement.
He added: "We will seek to generate free cash flow or liquidity from non-controlled assets and investments."
Meanwhile on Tuesday, Vodafone said first-half net profits soared by 56.5 percent to 7.542 billion pounds (8.764 billion euros, 12.15 billion dollars) in the six months to September, compared with the same part of 2009.
In reaction, the group ramped up its annual guidance for operating profit, saying it expected to earn between 11.8-12.2 billion pounds in its 2010/2011 financial year.
Revenues increased by 3.9 percent to 22.60 billion pounds in the reporting period.
"I am pleased to report a further improvement in organic service revenue growth, together with upgraded guidance," added Colao.
"We have also today announced an updated strategy, which positions Vodafone to realise further value from non-controlled assets, take full advantage of the most valuable telecommunications growth opportunities ahead and which will deliver sustainable revenue growth, stabilising margins and strong free cash flows."
© 2010 AFP