British mobile group Vodafone has released its financial results for the three months ended 31 December 2009, revealing that service revenue from its European subsidiaries fell 3.2% year-on-year on a like-for-like basis. For the three-month period revenues from Vodafone’s African and Central Europe units also fell, down 0.5% y-o-y, while the group’s Asia Pacific and Middle East subsidiaries bucked the trend, reporting 10.4% organic revenue growth compared to the same quarter in 2008. Group revenue, including revenue from handset sales, rose 10.3% to GBP11.5 billion (USD18.37 billion) for 3Q 2009, up from GBP10.47 billion a year earlier. Despite the continued declines the results are an improvement on the previous quarter, when the group’s European interests registered a 4.6% decline in service revenue, and its African and Central Europe division posted a revenue drop of 3.9%.
Vodafone has seen a general slowdown across Europe, due in part to factors such as troubled economic environments, increased competition and unfavourable regulation, with countries such as Spain highlighted as particular weak links. While the group has said that, despite being ‘stable’, its fortunes in Spain looked unlikely to improve in the short term, operations in Germany and the UK have reportedly seen a turnaround, with Vodafone claiming that cost-cutting measures have had a positive impact in the two countries.
On the back of the results Vodafone said it would raise its free cash flow target by GBP500 million to between GBP6.5 billion and GBP7 billion, while it also revised full year operating profit guidance to between GBP11.4 billion and GBP11.8 billion, from its previously advised range of between GBP11 billion and GBP11.8 billion.
At the end of December 2009 Vodafone had a proportionate customer base of 313.78 million.
Commenting on the results, Vittorio Colao, Vodafone CEO, said: ‘Service revenue trends have improved with continuing growth in our data and fixed line revenue. Free cash flow guidance has been raised reflecting the impact of our cost and working capital reduction programmes. We are on track to deliver on our strategic priorities in the current financial year.’