Vodafone has vowed to head off the credit crunch at the passafter unveiling a pre-emptive restructuring programme in the wake of a 35%profit slump in the first half.
Newly-installed chief executive Vittorio Colao said he wouldreduce operating costs by around £1bn per annum by 2011 in an attempt to offsetgrowing pressure from the macro-economic environment.
He also called a halt to Vodafone’s buy-and-build growthstrategy, saying that while Vodafone would continue to “support consolidation”where appropriate, its focus would be realigned on its existing businesses andany future buys would need to be funded through portfolio disposals in otherareas.
Vodafone maintained silence on the question of whether ornot any jobs would be lost in the UK as a result of the cost-cuttingmoves, but Colao’s pronouncements were well received as Vodafone stock jumpedon the announcement.
Overall, first half revenue was up 17.1% on the same periodlast year, hitting £19.9bn, although as stated profits fell 35% to £2.1bn.
Rallying his troops, Colao said: “We will pursue growth opportunitiesin total communications, specifically mobile data, enterprise and broadband. Inour emerging markets, the priority will be execution and we intend to furtherstrengthen capital discipline.”
He insisted Vodafone still had the “right assets andstrategy” to continue to dominate the mobile industry.
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