UK-based telecoms giant Vodafone Group has reported a 6.8% decline in revenue for the quarter ended 31 December 2018, attributed to a combination of factors including the adoption of the IFRS15 reporting standard, the sale of its Qatari subsidiary and foreign exchange headwinds. In the three months under review, the group generated a total turnover of EUR10.996 billion (USD12.5 billion), down from EUR11.797 billion in the corresponding period of 2017. Revenues from European operations amounted to EUR8.145 billion, down from EUR8.631 billion, while turnover from its ‘Rest of the World’ division declined by more than eleven percentage points year-on-year, to EUR2.547 billion. Group service revenue, meanwhile, totalled EUR9.787 billion, representing a 3.9% annualised decline.
Ahead of the final quarter of its current fiscal year (31 March 2019), Vodafone Group confirmed that – with trading during this latest quarter having been in line with management expectations – it expects organic adjusted EBITDA on an underlying basis to grow by around 3%, with free cash flow generation (pre-spectrum) of around EUR5.4 billion. Under IFRS 15 the group said it expects organic service revenue growth will be slightly higher, while its absolute adjusted EBITDA will be slightly lower.
In operational terms, at the end of 2018 Vodafone Group had a total of 275.216 million mobile subscribers on its books, down from 276.863 million a year earlier. Fixed broadband accesses continued to climb, however, reaching 17.056 million at 31 December 2018, up 8.3% y-o-y from 15.744 million a year earlier. Fixed line voice subscribers also increased, to 15.311 million at the end of the reporting period (Dec-17: 14.898 million), while pay-TV accesses declined marginally, from 9.740 million to 9.715 million.
Commenting on the quarterly performance, Vodafone Group CEO Nick Read said: ‘We have executed at pace this quarter and have improved the consistency of our commercial performance. Lower mobile contract churn across our markets and improved customer trends in Italy and Spain are encouraging, however these have not yet translated into our financial results, with a similar revenue trend in Europe to Q2. We enjoyed good growth across our emerging markets with the exception of South Africa, which was impacted by our pricing transformation initiatives and a challenging macroeconomic environment. Overall, this performance underpins our confidence in our full year guidance.’