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(Alliance News) - Vodafone Group PLC on Wednesday said it returned to organic service revenue growth in its third-quarter, helped by a much stronger showing in Germany, the telecommunication firm's largest market.
Total revenue in the quarter ended December 31 fell 4.7% to EUR11.20 billion from EUR11.75 billion a year earlier. The organic decline - which strips out the effects M&A activity and currency movements - was 0.4%.
Vodafone generates the bulk of its cash from service revenue, which includes monthly access charges, airtime usage and roaming. In the third quarter ended December, service revenue rose 0.4% on an organic basis. The organic service revenue figure is one that is closely eyed by analysts.
On a reported basis however, total service revenue fell 3.9% annually to EUR9.36 billion from EUR9.73 billion.
In Germany alone, service revenue rose 1.0% year-on-year on both an organic and reported basis to EUR2.91 billion.
"I am pleased the group returned to service revenue growth in Q3 as a result of the continued commercial momentum across our business, including our largest market Germany. Our good trading performance underscores our confidence in the outlook for the full year," Chief Executive Officer Nick Read said.
Vodafone reaffirmed its annual guidance, it forecast adjusted earnings before interest, tax, depreciation and amortisation between EUR14.4 billion and EUR14.6 billion. Free cash flow of "at least" EUR5 billion is expected, before restructuring and pre-spectrum costs.
"We have made further progress on our strategic priorities, including the IPO of Vantage Towers in early 2021, which remains firmly on track and will now include our 50% shareholding in the UK towers joint venture with Telefonica," Read added.
Back in January, the company said it plans to transfer its 50% holding in Cornerstone Telecommunications Infrastructure Ltd joint-venture into its European infrastructure unit Vantage Towers. Cornerstone, also 50%-owned by Spain's Telefonica SA, manages the duo's UK passive tower infrastructure.
Elsewhere in the third-quarter, Vodafone said it added 330,000 next-generation network broadband customers in Europe, taking the financial year-to-date figure to 1.1 million.
Europe mobile contract customers at quarter-end totalled 65.4 million, improved from 64.2 million a year earlier.
Read added: "Our networks have successfully delivered another quarter of record data traffic as many countries continue to endure Covid-19 lockdowns and customers depend on our services."
By Eric Cunha; ericcunha@alliancenews.com
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