British telecoms giant Vodafone Group has published its financial results for the six months ended 30 September 2016, revealing that group revenue was down 3.9% year-on-year at EUR27.054 billion (USD30.2billion) from a restated figure of EUR28.151 billion a year earlier.
With the company citing foreign exchange movements as the primary reason for the revenue decline, it did however note that organic service revenue was up by 2.3% year-on-year at EUR24.8 billion. In terms of regional contributions, Vodafone Group’s Europe division accounted for the lion’s share, generating revenues of EUR17.543 billion in H1 2017, down from EUR18.240 billion in the corresponding period a year earlier, while the Africa, Middle East and Asia Pacific (AMAP) unit reported turnover of EUR8.896 billion, down from EUR9.184 billion.
Meanwhile, group EBITDA declined 1.7% year-on-year to EUR7.9 billion, with this decline again primarily attributed to forex movements, with organic EBITDA said to have increased by 4.3%, supported by ‘strong cost control despite incremental drags from roaming, increased content costs and a higher operating cost base post-Project Spring’. Adjusted operating profit was flat, rising by just 0.1% to EUR2.283 billion, with organic adjusted operating profit increasing by 11.4%, driven by organic EBITDA growth, lower depreciation and amortisation charges and an increased contribution from joint ventures.
With Vodafone Group noting that the performance in the first half of its current fiscal year had been ‘modestly ahead’ of its expectations, it said European operations were performing ahead of plan, though it highlighted the increase of ‘competitive intensity’ in India. As a result, the company has made a very minor change to its full year guidance, saying it now expects organic EBITDA growth of between 3% and 6%, equivalent to EUR15.7 billion-EUR16.1 billion of EBITDA at guidance foreign exchange rates, slightly narrower than the EUR15.7 billion-EUR16.2 billion range originally envisaged. However, it said it continues to anticipate free cash flow at guidance foreign exchange rates of at least EUR4.0 billion, after all capex, before M&A, spectrum payments and restructuring costs.
In operational terms, at the end of September 2016 Vodafone Group’s mobile customer base totalled 469.740 million, up from 464.585 million three months earlier, with 121.658 million of those subscribers taking a service in Europe (end-June 2016: 120.907 million) and the remaining 348.082 million coming from its AMAP operations (end-June 2016: 343.678 million). Meanwhile, in the fixed broadband arena Vodafone Group reported a total of 14.048 million accesses at 30 September 2016, up from 13.721 million at the end of June 2016.
Vittorio Colao, Vodafone Group CEO said of the results: ‘We have further improved our performance during the first half of the financial year with Europe modestly ahead of our expectations – led by Germany and Italy – and good execution in AMAP. Our substantial network investments and ‘more-for-more’ propositions have allowed us to capture opportunities from strong data demand, supporting European mobile contract ARPU and continued growth in emerging markets.’