Vodafone Group reported a return to organic service revenue growth of 0.1 percent in its fiscal fourth quarter to March. Underlying revenues in Europe were down 2.4 percent year-on-year, while its AMAP region grew by 6.0 percent. Over the full year, organic service revenues were still down 1.6 percent, led by a 4.7 percent fall in Europe. Reported revenues grew 10.1 percent to GBP 42.23 billion, helped by the acquisitions of Ono in Spain and KDG in Germany, and the operator met its target for adjusted EBITDA, at GBP 11.7 billion for the year. Organic EBITDA was down 6.9 percent over the year, but the decline slowed to 3.6 percent in the second half, thanks to cost controls and the improved revenue trend. Net profit from continuing operations fell 48.2 percent to GBP 5.86 billion, and EPS was down 90.3 percent to 21.75 pence, due to a number of charges for deferred tax assets, higher depreciation after the acquisitions and increased investments and the gain the year earlier on selling the stake in Verizon Wireless.
For the new fiscal year, Vodafone forecast organic EBITDA of GBP 11.5-12.0 billion and positive free cash flow after all capex, but before M&A, spectrum and restructuring costs. In the past year, free cash flow on the same basis reached GBP 1.09 billion. Capital expenditure is estimated at GBP 8.5-9.0 billion, reflecting the second year of Project Spring investment. In the past year, capex was up 45.7 percent to GBP 9.2 billion. Vodafone also proposed a final dividend of 7.62 pence per share, up 2.0 percent, and said it tends to continue to grow dividends per share annually.
CEO Vittorio Colao said the operator saw increasing signs of stabilisation in many of its European markets, driven by "very strong" demand for data. Data volume across the group was up by over 80 percent in the year. In the last quarter of the year, organic service revenue grew 0.6 percent in the UK and 12.1 percent in India, while Germany fell 3.1 percent, Spain was down 7.8 percent, Italy declined 3.7 percent and other European markets fell 0.8 percent. The Project Spring investment project was on track, and the operator is already at 72 percent 4G coverage in Europe. With only 13 percent of customers using 4G there, there is still significant room for growth, the CEO said.
Vodafone ended the year with 445.84 million mobile customers, an increase of almost 2.3 million from the end of December. While a restatement of the customer base in the UK led to the loss of 1.7 million customers, this was offset by over 5.1 million new customers in India, as well as strong growth in Egypt. The fixed broadband base reached 12.05 million at the end of March, up by 257,000 from three months earlier thanks mainly to growth in Germany. Quarterly fixed service revenues were up 21.1 percent year-on-year, or 8.7 percent on an organic basis, to just over GBP 2.0 billion.
