Vodafone says tower IPO is on track for 2021
By Thomas Seal
INTERNATIONAL - Vodafone Group is looking beyond virus-induced market turbulence and pressing ahead with asset spinoffs as Chief Executive Officer Nick Read pushes to squeeze more out of company assets.
The company said Friday the initial public offering for the tower unit is on track for early 2021 in Frankfurt, assuaging investors concerned that the pandemic would derail this plank in Read’s strategy. Vodafone also said it was merging its towers in Greece with Wind Hellas Telecommunications SA.
“Big picture, everything looks to be on track,” said James Ratzer, an analyst at New Street Research.
Advisers had already been invited to pitch for the towers IPO, which was announced last year and was seen raising more than 2 billion euros ($2.3 billion), at a valuation of between 10 billion euros and 20 billion euros.
Vodafone said its new Vantage Towers venture produces earnings before interest, tax, depreciation and amortization of 680 million euros. That estimate seems to trail the the 900 million euros the company had flagged about a year ago, Ratzer said.
The pandemic has nevertheless weighed on sales. Organic service revenue fell 1.3 percent in the first quarter as coronavirus travel restrictions hit international roaming fees and slowed sales across the globe. The decline comes after a return to growth in the previous fiscal year, a sign Read’s push to streamline the company and cut costs had been bearing fruit.
The quarter’s results showed “the relative resilience of our operating model,” Read said in a statement Friday. “Whilst we have seen the direct impact on our revenue from travel restrictions and business project delays, we have also seen increased usage in voice and data, alongside record next-generation-network broadband customer net additions in Europe.”