Vodafone Group PLC Tuesday posted a $13.2 billion net profit for fiscal 2008 compared with a loss a year earlier and announced that Chief Executive Arun Sarin will step down and be replaced by his deputy Vittorio Colao.
Sarin, who has run the world's largest mobile phone operator by sales for the past five years, will retire after the company's annual general meeting July 29.
Sarin, 53, joined Vodafone's board in 1999 and became chief executive in July 2003. He went through a rocky patch two years ago, when nearly 10% of Vodafone shareholders voted against his re-election as chief executive.
But the company has since outperformed City profit forecasts and enjoyed big revenue growth in fast-growing markets such as India and Turkey.
The England-based mobile phone operator said net profit for the 12 months to end-March was $13.1billion, compared with a net loss of $9.7 billion a year earlier. Adjusted net profit, which excludes impairment losses, non-operating income from associate companies, and some currency effects, rose 6.7% to $13.1 billion, in line with analysts' estimates.
Annual sales rose 14.1% to $70 billion, driven by increased data sales, growth in emerging markets and positive currency exchange rates, in particular the strong rupee and euro against the British pound.
The sales figure slightly exceeded analysts' consensus of $69.4 billion and was above company guidance for full-year revenue of $68 billion to $69.2 billion.
Vodafone derives 60% of sales from countries where the euro is the main currency and has an extensive Indian operation in Vodafone Essar.
The results, combined with news of Vodafone's CEO succession, will likely push its shares higher at the open, according to spread betting company Cantor. It thinks Colao was groomed to replace Sarin and the timing is right. The stock closed at 321 cents Friday, giving the company a market capitalization of about $171.2billion.
"The guidance for 2009 is likely to push up people's forecasts," said John Davis, analyst at Dresdner Kleinwort. He added that Sarin's departure was unlikely to greatly affect the company's share price.
"It was well trailed and its not like either Sarin or Colao are massively disliked by the market," Davis said.
In its outlook, the company said that it expects fiscal 2009 revenue to rise to between $78.5 billion and $80.3 billion, and operating profit for 2009 between $21.7 billion and $22.6 billion.
"The group continues to drive revenue growth, particularly in respect of its communications strategy for data and fixed broadband services and in emerging markets," Vodafone said in a statement.
Earnings before interest, taxes, depreciation and amortization, or Ebitda, rose 10% to $26 billion in fiscal 2008, compared with $23.6 billion a year earlier.
Vodafone increased its total dividend per share by 11.1% to 7.51 pence, another factor likely to be welcomed by markets according to Cantor.
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