Vodafone Group records EUR7.6bn loss in FY19

14 May 2019

British telecoms giant Vodafone Group has revealed a loss of EUR7.6 billion (USD8.5 billion) for its financial year ended 31 March 2019, noting that this was ‘primarily due to a loss on disposal of Vodafone India (following the completion of the merger with Idea Cellular)’. For the twelve-month period under review, Vodafone reported that group revenues declined by 6.2% year-on-year to EUR43.7 billion, reflecting foreign exchange headwinds, the impact of the adoption of IFRS 15 and the sale of Vodafone Qatar. Meanwhile, the group recorded an operating loss of EUR951 million in FY 2019, down EUR5.3 billion, primarily driven by impairments totalling EUR3.5 billion in Spain, Romania and Vodafone Idea, and EUR300 million of losses in its equity associates and joint ventures. With regards to the net loss of EUR7.6 billion for the fiscal year, Vodafone said this reflected the aforementioned impairments, as well as a EUR3.4 billion loss related to the Vodafone India disposal, higher net financing costs and the ‘de-recognition of a deferred tax asset in Spain’.

Looking ahead, Vodafone has said that, based on guidance foreign exchange (FX) rates and under IFRS 15 and IFRS 16 accounting standards, it expects adjusted EBITDA to be between EUR13.8 billion and EUR14.2 billion in FY 2020, with this including ‘approximately EUR400 million of negative non-cash impacts from the adoption of IFRS 15 and IFRS 16 accounting standards’. In addition, the company noted that it aims to generate free cash flow pre-spectrum of at least EUR5.4 billion, after all CAPEX, before M&A and restructuring costs, and based on guidance FX rates.

Commenting on the group’s financial performance, Group CEO Nick Read was cited as saying: ‘We are executing our strategy at pace and have achieved our guidance for the year, with good growth in most markets but also increased competition in Spain and Italy and headwinds in South Africa. These challenges weighed on our service revenue growth during the year, and together with high spectrum auction costs have reduced our financial headroom.’

In operational terms, meanwhile, Vodafone Group reported a mobile subscriber base totalling 273.874 million as at the end of March 2019, broadly unchanged from the 273.654 million it had a year earlier. Fixed broadband access continued to increase, however, reaching 17.370 million at end-March 2019, representing an 8.1% annualised increase, while the number of fixed voice lines on the company’s books stood at 15.540 million, up from 14.936 million a year earlier. Pay-TV accesses remained flat at 9.763 million, against 9.749 million as at end-March 2018.

United Kingdom, Vodafone Group, Vodafone India