Vodafone Group reported revenues for its fiscal first quarter to 30 June down 7.7 percent from a year earlier to GBP 10.77 billion, hurt by the weaker economic conditions in Europe. On an organic basis, excluding forex and M&A effects, service revenues rose 0.6 percent, as 6.1 percent growth in the Africa, Middle East and Asia division offset a drop of 1.6 percent in Europe.
In Europe, service revenues fell 8.7 percent on a reported basis and 1.6 percent on an organic basis to GBP 6.94 billion. While Germany posted organic growth of 4.2 percent, the UK fell by 0.8 percent, Italy was down 7.7 percent, and Spain fell 10.0 percent, hurt by competitive pressures and the slowing economy. The Netherlands declined 1.5 percent, after the fire there took 3 points off revenue growth.
In Africa, the Middle East and Asia, service revenues were down 4.0 percent on a reported basis and up 6.1 percent on an organic basis to GBP 3.03 billion. Organic growth in India slowed to 16.2 percent, due to regulatory changes in tariffs and slower growth at Indus Towers. Vodacom improved 5.7 percent, and Egypt was up 4.7 percent, while Australia fell 15.2 percent, hurt by termination rate cuts and branding problems.
Vodafone CEO Vittorio Colao said that despite the economic difficulties, the company was making progress on strategic initiatives, such as growth in data, enterprise and fixed-line services. Data revenue was up 17.1 percent on an organic basis to GBP 1.7 billion in the quarter, with smartphone penetration in its Europe customer base at 28.7 percent. Fixed-line sales rose 4.0 percent to GBP 863 million, based on 6.3 million fixed broadband customers. Enterprise sales were little changed, as growth among multinationals was offset by the weaker economy in southern Europe.
Vodafone reported capex for the period down by 7.5 million to GBP 1.11 billion, and free cash flow fell by 24.9 percent to GBP 943 million. The operator maintained its earlier outlook for the full year, for growth in adjusted operating profit and stable free cash flow, excluding any one-time items.
The company finished the period with a total 406.407 million customers, up from 404.691 million three months earlier.
