Vodafone Group revenue increased by 9.3 percent to GBP 21.8 billion for the first six months of FY2010 ending 31 March. The group EBITDA increased by 2.9 percent to GBP 7.455 billion, while decreasing 7.9 percent organically. At the same time the adjusted operating profit increased by 2.4 percent to GBP 5.9 billion with a positive contribution from Verizon Wireless and foreign currency benefits offsetting lower profit in Europe. Vodafone’s free cash flow grew 29.1 percent to GBP 4 billion, reflecting foreign currency benefits, improved working capital and receipt of the deferred GBP 0.2 billion dividend from Verizon Wireless. The profit for the period amounted to GBP 4.795 billion compared with GBP 2.169 billion for the same period last year. Adjusted earnings per share increased by 16 percent to GBP 0.0872 driven by favourable foreign exchange and the dividends per share have increased by 3.5 percent to GBP 2.66 consistent with the Group’s dividend policy. The first half results support Vodafone’s expectations for full year adjusted operating profit in the range of GBP 11 billion to GBP 11.8 billion and free cash flow around the upper end of the GBP 6.0 billion to GBP 6.5 billion range. The assumptions for foreign exchange rates used within the outlook ranges for the 2010 financial year are unchanged. The total mobile customer base grew by 9.699 million during the quarter to 293.54 million of which 76.7 percent is a prepaid user. The growth was driven by Asia Pacific and Middle East with 8.265 million net additions of which 6.396 million came from India.
In Europe organic service revenue declined 4.5 percent reflecting the economic and competitive environment, with 17.8 percent more mobile data revenues and 7.3 percent more fixed line revenues are still being offset by ongoing price pressures. Total costs in Europe declined by 3.3 percent resulting in an EBITDA margin decline of 1.0 percentage point. In Africa and Central Europe service revenue increased 34.6 percent reflecting the full consolidation of South Africa-based Vodacom following completion of the stake purchase in May 2009 and foreign exchange. On an organic basis service revenue dropped 3.2 percent with continued growth in Vodacom being offset by declines in Turkey and Romania. EBITDA margins declined around four percentage points primarily reflecting lower profitability in Turkey. In Asia Pacific and Middle East service revenue increased by 17.8 percent reflecting a strong contribution from India where service revenue grew by 20.5 percent on a constant currency basis. During the period the operator added 14.1 million customers in India. Overall EBITDA margin in the region declined by 3.1 percentage points reflecting lower margins in India caused by the pricing environment and investment in new circles, and start up costs in Qatar. Verizon Wireless contributed about 34 percent of adjusted operating profit and organic service revenue growth was 7.5 percent, EBITDA margins were maintained and data revenue continued to grow rapidly.
