Vodafone Q1 German revenues fall

Telecoms group Vodafone reported a rise in first quarter revenues, driven by growth in the UK, but reported a fall in Germany, its biggest market.

The company on Monday said group service revenue increased by 2.5% to €9.5bn. Germany fell 0.5% due to the impact of new legislation as Vodfaone lost broadband and TV customers.

Service revenue in Turkey increased to 35.8%, driven by higher inflation. Total reported group revenue was €11.3bn.

Vodafone's German TV customer base fell by 79,000 while its cable broadband service saw a 34,000 decline after regulatory changes ended processes like automatic recontracting.

“We have executed in line with our expectations, delivered another quarter of growth in both Europe and Africa, and seen an acceleration in business growth. Whilst we are not immune to the current macroeconomic challenges, we're on track to deliver financial results for the year in line with our guidance,” said chief executive Nick Read.

Victoria Scholar, head of investment at Interactive Investor, said amid concerns about a global recession, "Vodafone (and other telcos) could present itself as a stable sector stock to weather the storm with relatively stable revenues and a robust dividend".

"Long-term investors in Vodafone have had a difficult time with the stock, which has struggled ever since the peak in 2015. However it looks as though the stock is attempting to reverse at least some of those losses with shares outperforming the broader market since the lows in March, rallying around 10% off the lows. However, there is still a long way to go to retest the 2022 peak from February.”

At financial platform AJ Bell, investment director Russ Mould said Vodafone’s share price "continues to have all the vitality of a beached whale, having struggled to make any meaningful progress for more than a decade".

"Current chief executive Nick Read has had a four-year crack at it but has obviously been constrained by the pandemic and a lot of economic uncertainty. Can he do something bold enough to make the market sit up and take notice, or is Vodafone doomed to a stagnant existence?”