Vodafone Group CEO Nick Read insisted the operator delivered a solid commercial performance in its fiscal Q3 2020 (calendar Q4), despite suffering a dip in revenue due to the impact of further lockdown measures across its markets.
In a trading update, Vodafone recorded revenue of €11.2 billion, down 4.7 per cent year-on-year, with total service revenue dropping 3.9 per cent to €9.4 billion.
Service revenue did increase in its largest market, Germany, by 1 per cent to €2.9 billion, which was the bright spot in Europe where the figure overall dropped 2.4 per cent to €7.4 billion. Italy and Spain, in particular, suffered from Covid-19 (coronavirus) restrictions and price competition.
Growth in Germany was fuelled by all of its segments, including higher mobile usage and a strong performance in its Business operations.
Its South African operation Vodacom suffered a service revenue decline of 9.1 per cent to €1 billion, while Other Markets dropped 9.5 per cent to €806 million.
Vodafone remained bullish in light of the decline, stating underlying trends excluding the impact from lower roaming and visitors “were broadly similar quarter-on-quarter”.
It also reaffirmed its full year outlook, with adjusted earnings projected to reach €14.4 billion to €14.6 billion and the generation of at least €5 billion in free cash flow.
Pandemic and IPO
Read pointed to Vodafone’s role in stemming the impact of the pandemic, stating it had contributed €150 million directly and through in-kind services for those in need. He added it had seen another record quarter for data traffic, as customers continue to depend on its services.
In Europe, the average mobile data usage per customer increased from 4.6GB to 6.7GB. It also increased mobile contract customers from 64.2 million to 65.4 million.
Read added the company’s planned IPO [1] of its infrastructure unit Vantage Towers remains “on track” for early 2021.
It will provide an update on the plan later this month.
[1] https://www.mobileworldlive.com/featured-content/top-three/vodafone-adds-uk-assets-to-tower-spin-off
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