Vodafone improves outlook on back of strong first half

Company said its total revenue grew 5% to €22.5bn in the six months to the end of September, driven by service revenue growth in Europe and Africa and a recovery in handset sales following Covid disruption in the prior year
Vodafone improves outlook on back of strong first half

Vodafone has improved its earnings guidance.

Communications giant Vodafone has reported marginal revenue growth in Ireland as part of a strong group-wide first half to its financial year, which has resulted in it raising its annual forecasts.

Vodafone raised its forecast for this year's free cash flow after it reported 6.5% growth in adjusted core earnings in its first half, driven by a good performance in Germany, its largest market.

The company raised the floor of its full-year earnings guidance to €15.2bn from €15bn, with the top remaining at €15.4bn, and increased its free cash flow target to at least €5.3bn from €5.2bn.

"Our strengthened performance in Africa and Europe puts us on track to be at the top end of our guidance for this year, as well as firmly within our medium-term financial ambitions," group chief executive Nick Read said.

Vodafone said its total revenue grew 5% to €22.5bn in the six months to the end of September, driven by service revenue growth in Europe and Africa and a recovery in handset sales following Covid disruption in the prior year.

Adjusted core earnings came in at €7.6bn, with growth boosted by a 0.7 point margin increase.

Vodafone Ireland

In Ireland, Vodafone said its service revenue for its second quarter reached €203m, an increase of 0.8% on a year-on-year basis. 

This growth, it said, was driven by continued growth in mobile – both contract and pre-paid customers – and fixed broadband and reflecting higher roaming revenue.

“We are very pleased to see increased growth across all core areas of our business this quarter, driven by continued investment and expansion across our mobile and fixed broadband services. Growth has been particularly strong across our mobile contract base, reflecting continued satisfaction with the reach, reliability, and strength of our network in Ireland,” said Vodafone Ireland chief executive Anne O’Leary.

Vodafone Ireland’s total fixed broadband customer base increased by 5.3%, year-on-year, to 309,000 in the second quarter.

Overall, Vodafone’s total mobile customer base increased by 1.5% over the quarter – with more than 28,000 additional contract and pre-paid customers joining its network.

Analysts are likely to nudge up their Vodafone forecasts on the back of the latest group results. They had expected Vodafone to report earnings of €15.2bn this year and generate cash flow of €5.23bn, according to a company-compiled consensus.

Organic service revenue grew 1.2% in both Germany and Britain, but fell 2.5% in Italy, and declined 0.6% in Spain after growth in the first quarter evaporated in the second.

Vodafone said it had stabilised its financial performance in the intensively competitive Spanish market.

It said it was "actively pursuing" opportunities in the country, including enhancing strategic network partnerships and in-market consolidation.

• additional reporting Reuters

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