Vodafone Q1 revenue rises, appoints new CFO

Telecoms giant Vodafone said first-quarter group service revenue rose 3.7%, helped by its UK operations.

The company on Monday said revenue for the period came in at €10.7bn from €9.5bn a year earlier. Britain increased by 6.5%, while Germany, Spain and Italy narrowed falls.

It also reiterated full-year guidance of adjusted earnings before interest, tax, depreciation, and amortisation after leases of around €13.3bn and adjusted free cash flow of €3.3bn.

The company added that it had appointed former SAP chief financial officer Luka Mucic to the same role at Vodafone, starting on September 1.

“The transformation at Vodafone is in its infancy, and there’s a long way to go - but tentative signs of green shoots are emerging. Europe squeezed out overall growth in service revenue, as declines eased in Germany and Italy," said Matt Britzman, Hargreaves Lansdown equity analyst.

"Germany remains a key battleground and focal point of the transformation, after more than €20bn of investment it’s vital that trends continue to improve from here and the region returns to growth sooner rather than later. Price hikes are to thank for the relative improvement over the quarter in Germany."

"That’s great for boosting short-term performance but there are more fundamental challenges that need to be dealt with – IT systems have been slow to adapt to new regulations and poor network performance means customer satisfaction levels have been under pressure in recent times."

Service revenue decline in Germany more than halved quarter-on-quarter to 1.3%, as price rises partially offset the impact of customer losses. In Italy, improved demand from businesses helped reduce the service revenue decline to 1.6% from 2.7% in the previous quarter, while Spain improved to a fall of 3.0% from 3.7%.

Reporting by Frank Prenesti for Sharecast.com