Vodafone reports in-line sales, reiterates outlook

Vodafone reports in-line sales, reiterates outlook
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First Published: Fri, Jul 24 2009. 12 09 PM IST
Updated: Fri, Jul 24 2009. 12 09 PM IST
London: Vodafone, the world’s largest mobile phone firm by revenues, reported a slight decline in organic sales, in line with muted market expectations, as strength in India and Africa compensated for European weakness.
Organic service revenue fell 2.1% in the quarter to end-June but reported group revenue rose 9.3% to £10.743 billion ($17.74 billion), thanks to positive currency effects and a higher stake in South Africa’s Vodacom.
The group, the first of Europe’s major telecoms carriers to report this quarter, reiterated its reduced full-year guidance on Friday for flat or slightly lower profits. It has not given precise guidance for full-year revenue.
“Nothing wildly exciting in the results, which is kind of good,” said one London-based analyst who asked not to be named.
US carrier AT&T pleased investors on Thursday with a smaller-than-expected drop in quarterly profit and flat sales.
Spain and Britain continued to show sales declines as the economies in those countries remained weak, and other pockets of weakness appeared in Germany and in Romania, where currency effects hurt the results. Italian revenue grew by 3%.
Cuts in mobile termination charges, which operators charge to connect incoming calls to their networks, reduced roaming as tourists and business people cut down on travel, and lower spend by prepay customers all hurt Vodafone’s revenue.
Vodafone added 8 million customers in the quarter, taking its proportionate customer base to 315 million. Verizon Wireless, its US joint venture with Verizon Communications, had 1.1 million net customer additions.
Vodafone’s data revenue grew 19% organically to £888 million. Free cashflow rose 21%to £1.896 billion, while the company’s net debt at 30 June stood at £31.2 billion.
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First Published: Fri, Jul 24 2009. 12 09 PM IST