UK-based telecoms giant Vodafone Group has published its financial results for the six months ended 30 September 2018, revealing a notable drop in revenue and loss for the period, primarily as a result of the loss recorded on the disposal of Vodafone India, following the completion of the latter’s merger with Idea Cellular.
In the six-month period under review Vodafone Group generated a total turnover of EUR21.796 billion (USD24.57 billion), down from EUR23.075 billion in the corresponding period a year earlier, which it said reflected foreign exchange headwinds, the impact of the adoption of the IFRS 15 reporting standard and the sale of its Qatari unit. Group service revenue meanwhile totalled EUR19.711 billion (IAS 18 reporting basis), down from EUR20.592 billion, although the company noted that organic service revenue (i.e. excluding handset financing) was up 0.8% year-on-year, with ‘good commercial and financial performance in most markets offset by increased competition in Italy and Spain’. Adjusted EBITDA for the period under review was EUR7.078 billion, down 4.2% year-on-year on a reported basis, but up 2.9% in organic terms, supported by ‘a third consecutive year of net reduction in operating expenses’. Further, the Group posted an operating loss of EUR2.071 billion for the first half of its current fiscal year, largely driven by impairments totalling EUR3.5 billion in Spain, Romania and India, while net losses reached EUR7.833 billion in the six-month period under review. This loss, it said, reflected the aforementioned impairments, as well as ‘higher net financing costs (following adverse foreign exchange movements, mark to market losses and higher gross borrowings) and the de-recognition of a deferred tax asset in Spain’.
With regards to its current financial year, which ends 31 March 2019, Vodafone Group has opted to update its full-year guidance, saying it now expects underlying organic adjusted EBITDA growth of around 3% (narrowed from previous forecast of between 1% and 5%). Meanwhile, free cash flow (pre-spectrum) is now expected to be EUR5.4 billion, up from ‘at least EUR5.2 billion’.
In operational terms, at the end of September 2018 Vodafone Group had a total of 275.834 million mobile subscribers on its books, up marginally from 275.699 million a year earlier. Fixed broadband accesses across the group totalled 16.715 million at the end of the reporting period, up from 15.365 million at end-September 2017, while fixed line voice customers numbered 15.060 million (Sep-17: 14.628 million) and pay-TV customers stood at 9.677 million (Sep-17: 9.678 million).