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(Sharecast News) - Vodafone Group reported a 4.2% increase in group service revenue in its first half on Tuesday, to €18.62bn, or 2.3% excluding Turkey, although overall revenue and profits fell.
The FTSE 100 telecoms giant said both Europe and Africa experienced growth in service revenue, with Europe seeing a 0.4% increase in the first quarter and a 1.5% increase in the second, while Africa reported a 9.0% growth in both the first and second quarters.
Germany recorded 1.1% growth in the second quarter following a 1.3% decline in the first, while Vodafone Business recorded 4.4% growth in the first half.
However, the group's overall revenue declined 4.3% to €21.9bn, primarily due to adverse foreign exchange rate movements and the disposal of Vantage Towers, Vodafone Hungary, and Vodafone Ghana in the previous financial year.
Operating profit decreased 44.2% to €1.7bn, which the board put down to business disposals in the prior financial year, adverse foreign exchange rate movements, and a lower share of results from associates and joint ventures.
However, adjusted EBITDAaL saw modest growth of 0.3% to €6.38bn despite a significant increase in energy costs.
The company reported an adjusted free cash outflow of €1.5bn, reflecting lower adjusted EBITDAaL and lower dividends from associates and joint ventures.
During the period, Vodafone announced a merger with Three in the UK and the sale of Vodafone Spain as part of its efforts to right-size for growth.
The group reiterated its 2024 guidance for adjusted EBITDAaL to be "broadly flat" at around €13.3bn and adjusted free cash flow to be about €3.3bn.
Vodafone declared an interim dividend of 4.5 euro cents per share, with a record date of 24 November.
"During the first half of the year, we have delivered improved revenue growth in nearly all of our markets and have returned to growth in Germany in the second quarter," said group chief executive Margherita Della Valle.
"Vodafone's transformation is progressing - our focus on customers and simplifying our business is beginning to bear fruit, although much more needs to be done.
"We have also announced transactions to strengthen our position in the UK and exit the challenging Spanish market in order to right-size our portfolio for growth."
At 0820 GMT, shares in Vodafone Group were down 1.03% at 76.6p.
Reporting by Josh White for Sharecast.com.
