Vodafone Group records EUR6.1bn loss in FY 2017

16 May 2017

British telecoms giant Vodafone Group has announced a loss of EUR6.1 billion (USD6.7 billion) for its fiscal year ended 31 March 2017, with this largely attributed to non-cash tax impairment in India of EUR3.7 billion.

In the twelve-month period under review Vodafone Group generated a total turnover of EUR47.6 billion, representing a 4.4% year-on-year decline, with this primarily due to foreign exchange movements. However, the company recorded a 1.9% annual increase in organic service revenue – or +2.7% when excluding the impact of regulatory cuts to roaming charges and mobile termination rates. Meanwhile, organic service revenue in Europe was up 0.6% y-o-y in FY 2017, on the back of ‘improving trends in both consumer and enterprise segments, despite an incremental drag from EU roaming regulation’; ex-regulation, European revenues were up by 1.6%. By comparison, organic service revenue at the group’s Africa, Middle East and Asia Pacific (AMAP) division was up 7.7% y-o-y, with this said to be down to ‘growth in all [of the company’s] major markets’.

Group adjusted EBITDA for FY 2017 was flat at EUR14.1 billion, though Vodafone Group reported that organic adjusted EBITDA was up by 5.8% against the previous financial year, noting that this faster pace of growth when compared to service revenue was down to its ‘Fit for Growth’ cost efficiency programme more than offsetting ‘incremental drags from roaming cuts, increased content costs and a higher operating cost base post-Project Spring’. Adjusted EBIT was up 5.3% at EUR4.0 billion, with organic adjusted EBIT increasing by 7.0% as adjusted EBITDA growth outpaced the increase in depreciation and amortisation charges. Reported operating profit more than doubled to EUR3.7 billion, meanwhile, boosted by a EUR1.3 billion gain from the merger of Vodafone Netherlands and Ziggo and a EUR600 million impairment charge related to Romania.

In operational terms, at the end of March 2017 Vodafone Group had 268 million mobile subscribers on its books, up from 264 million a year earlier, with an increase in accesses in the AMAP region (up 6.8% y-o-y to 152 million), more than offsetting declines in Europe (down 4.8% y-o-y at 115 million). In the broadband arena, meanwhile, Vodafone Group reported 14.7 million subscribers at end-March 2017, up from 13.4 million a year earlier; when including those accesses attributable to Dutch joint venture VodafoneZiggo it said that the figure increased to 17.9 million.

United Kingdom, Vodafone Group