Highlighting a strengthened performance in Africa and Europe that puts the European-wide operator on track to be at the top end of its guidance for the full fiscal year, Vodafone has released first half-year results showing solid advances in revenue, EBITDAaL and cash inflow, but with profits pegged back.
For the six months ended 30 September 2021, Vodafone announced total revenues of €22.489bn, an increase of 5% compared with the same period a year earlier, driven by service revenue growth in Europe and Africa, recovery in handset sales following Covid-19 disruption in the prior year, as well as favourable foreign exchange movements.
Adjusted EBITDAaL increased by 6.5% on an annual basis to €7.6bn, due to both the aforementioned revenue growth and a legal settlement in Italy. The Adjusted EBITDAaL margin was 0.7 percentage points higher year-on-year, at 33.6%.
However, operating profit decreased by 21.9% to €2.6bn, reflecting, said the operator, a prior year gain of €1bn arising on the merger of Vodafone Hutchison Australia into TPG Telecom Limited. Excluding this, the company said that operating profit would have increased, reflecting higher adjusted EBITDAaL and lower depreciation and amortisation, partly offset by a lower share of profits from associates and joint ventures.
The Group made a profit for the period of €1.3bn, slipping back on the €1.5bn a year ago, primarily driven by lower operating profit more than offsetting lower financing costs and a net income tax credit. The tax credit was attributable to one-off deferred tax credits in the UK and Italy reflecting the increase in the future statutory tax rate in the UK and the revaluation of assets in Italy.
Looking at customer numbers, the half-year results showed that Vodafone had 66 million European mobile contract customers, up by one million on the same period a year earlier, and grew broadband customers by 200,000 over the course of the year to total 25.6 million. Internet of things SIM connections surged 21% year-on-year to 136 million. At the end of the half-year, Vodafone 5G was available in 244 European cities, almost double the number a year ago.
Assessing the half-year results for the company, group chief executive Nick Read said they showed how the company has demonstrated good sustainable growth and solid commercial momentum. “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,” he added. “We know there is more to do, and our focus remains on driving growth. We are structured for value creation, with operational priorities and portfolio actions which are designed to improve returns at pace.”
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Going forward, the company said that it would focus on its strategy to be the most simplified and efficient operator, offer a social contract shaping the digital society and be the leading gigabit network provider. It said it would also prioritise three operational areas, namely: strengthen commercial momentum in Germany; accelerate operational transformation in Spain; and position Vodafone Business to maximise EU recovery funding opportunities.
The results come hot on the heels of Vodafone expanding its partnership with CityFibre to establish the independent fibre network provider as its anchor customer across the country, potentially making it the UK’s largest retail provider of full-fibre to consumers, bringing the service to eight million homes nationwide.