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(Alliance News) - Vodafone Group PLC on Monday said its first half went according to plan, with the telecommunications firm recording a swing to profit and reporting an improved quarter-on-quarter service revenue performance.
Group revenue in the six months to September 30 fell 2.3% annually to EUR21.43 billion from EUR21.94 billion.
Vodafone swung to a pretax profit of EUR2.05 billion from a EUR511 million loss a year earlier. The first half of the last financial year was hit by a EUR2.60 billion loss from its share of results from joint ventures. This year, Vodafone booked a EUR260 million such gain.
Vodafone generates the bulk of its cash from service revenue, which includes monthly access charges, airtime usage and roaming. For the whole of the first half, service revenue was 0.8% lower year-on-year at EUR18.42 billion from EUR18.54 billion.
Promisingly, its service revenue performance improved quarter-on-quarter on an organic basis. The organic service revenue decline in the second quarter was 0.4%, tempered from the 1.3% annual fall in the first quarter.
"Today's results underline increased confidence in our full-year outlook. We are reporting a resilient first half performance, and we continue to see good commercial momentum across the group," Chief Executive Officer Nick Read said.
"Covid-19 and the reduction in roaming revenues, through the significant reduction in international travel, is currently obscuring our underlying commercial progress, with Q2 service revenue growing by 1.5% excluding roaming. We are now two years into our longer-term strategy to transform Vodafone into a business that enables a digital society, generating both sustainable growth and attractive returns. We are executing at pace, but there remains more to be done to achieve our goals."
Vodafone declared a 4.50 cents dividend for the first half, flat year-on-year.
Looking ahead, the FTSE 100 company affirmed that it expects free cash flow of at least EUR5 billion for the full year.
Annual adjusted earnings before interest, tax, depreciation and amortisation are expected to land between EUR14.4 billion and EUR14.6 billion. At best, this will be a 1.9% decline from EUR14.88 billion in the year that ended this past March 31.
Vodafone's first-half adjusted Ebitda fell 1.9% year-on-year to EUR7.02 billion.
The first-half saw increases to customer numbers in Europe, however. Mobile contact customers rose to 65.0 million from 63.8 million a year earlier and broadband customer numbers edged up to 25.4 million from 24.5 million.
Vodafone added that the float of Vantage Towers is on-track. The company back in July said it will list the newly-formed unit on the Frankfurt stock exchange.
Vantage Towers is "Europe's leading tower infrastructure platform", Vodafone said at the time, with over 68,000 towers across nine markets.
Vodafone shares were 3.3% higher at 123.50 pence each in London on Monday morning, making it one of the best blue-chip performers.
By Eric Cunha; ericcunha@alliancenews.com
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