Vodafone has warned that rising inflation and an uncertain economic climate are likely to affect the company’s earnings this year and could also hamper its efforts to broker deals.
The mobile phone giant said it expected adjusted core earnings of €15-15.5 billion euros ($15.7-$16.2 billion) this financial year, marginally lower than the average analyst forecast of €15.57 billion.
“The current macroeconomic climate presents specific challenges, particularly inflation, and is likely to impact our financial performance in the year ahead,” the company said in a statement.
Shares in Vodafone dropped by 3% in early trading, eliminating the gains made on Monday.
Vodafone Chief Executive Nick Read has been focused on deals in Spain, Italy, Britain and Portugal, but admitted that the current financial landscape made things more complicated.
“There are opportunities across four markets that we are pursuing, and we’re engaged with a number of players in those opportunities,” Read told reporter.
“Clearly it’s a more challenging macroeconomic backdrop, and so that will have a factor on some of the players’ decisions, but overall we continue to make good progress on those discussions.”
Last week, UAE-based telecoms company e& said it had bought a $4.4 billion stake in Vodafone. Read said he had already spoken with e&’s chief executive Hatem Dowid, describing their conversation as “very good”.