Vodafone Group sees lower reported revenues in H1 2014/15

11 Nov 2014

UK-based telecoms giant Vodafone Group has published its financial results for the six months ended 30 September 2014, revealing a 3.0% year-on-year decline in revenues on an organic basis. With total turnover standing at GBP20.752 billion (USD34.79 billion) in the period under review, this was, however, up 8.9% in reported terms, while group service revenues amounted to GBP19.139 billion, representing a 9.2% increase on a reported basis, but down 2.8% in organic terms. European service revenues, meanwhile, declined by 6.5% in the period under review, with this attributed to ‘ongoing pressures from competition, regulation and weak economies’. Nonetheless, Vodafone Group noted that trends were showing signs of stabilisation, with second quarter revenue falling by 5.0%, reflecting sequential improvements in almost all European markets. By comparison, organic service revenue in the Africa, Middle East, Asia Pacific (AMAP) region, which accounted for 30.5% of total group service revenue, rose by 5.7%, with growth in most markets.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 10.0% against the first half of Vodafone Group’s 2015 financial year to GBP5.884 billion on an organic basis (up 5.5% in reported terms), while the group EBITDA margin fell by 0.9 percentage points to 28.4%. Such a decline, the company noted, ‘reflected the impact of continued revenue declines in Europe, particularly in Spain, Germany and Italy, which offset broadly stable margins in Africa, Middle East, Asia Pacific (AMAP)’. Adjusted operating profit meanwhile declined to GBP1.756 billion, down from GBP2.490 billion, as higher reported EBITDA was offset by higher amortisation and depreciation costs, mainly due to the acquisition of KDG and the consolidation of Vodafone Italy.

In operational terms, at the end of September 2014 Vodafone Group reported a total mobile subscriber base of 438.469 million, up 13.5% year-on-year from 386.437 million. Fixed broadband accesses, meanwhile, stood at 11.221 million, up from 5.160 million at end-September 2013.

Commenting on the group’s performance, Vodafone Group CEO Vittorio Colao said: ‘We have made encouraging progress during the quarter. There is growing evidence of stabilisation in a number of our European markets, supported by improvements in our commercial execution and very strong demand for data. Our two year, GBP19 billion investment programme is well underway, and customers are beginning to see the benefits: in wider 3G and 4G data coverage, improved voice quality and reliability, and increased access to next generation fixed line services.’

United Kingdom, Vodafone Group