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Vodafone reduces its outlook and seeks cost savings

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On Tuesday, Vodafone reduced its full-year cashflow forecast and earnings guidance. The company attributes the decline to rising energy costs and poor performance in Germany, Italy, and Spain. According to CEO Nick Read, the European mobile operator must navigate a “challenging macroeconomic environment.”
In addition, the group intends to cut 1 billion euros in costs over the next three and a half years. Vodafone reported a 2.6% drop in adjusted earnings for the first half of this year.
The company’s underperformance in Germany, its largest market, worsened in the second quarter. Its performance in Italy and Spain also deteriorated quarter on quarter, owing to fierce competition. Britain, on the other hand, was a bright spot, with service revenue increasing following consumer price increases.
Vodafone is raising prices in 11 of 12 markets, with the majority of increases tied to inflation. In addition, the company intends to cut 1 billion euros in costs over the next three and a half years. Following the half-year results, its shares fell 9% to a two-year low of 95 pence.

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