Slow European business impacts Vodafone’s H1 results to end-September

Vodafone reported a sharp rise in its first half profits as revenues rose slightly ahead of the disposal of its US$130 billion stake in Verizon Wireless.

The company saw continuing weakness in Europe though, with the revenue increase coming from acquisitions and growth in non-European markets.

Performance in the six months to end-September in the major European markets of Germany, the UK and the Netherlands remained under pressure due mainly to increasing price competition. Service revenues in Southern Europe fell 14.9 per cent.

Service revenue in the rest of the world however grew by 5.8 per cent, with good growth in most markets, partially offset by declines in Australia and New Zealand.

Group revenue in the six months to end-September was up by 1.2 per cent at £22.0 billion (US$35 billion). Excluding acquisitions, revenues would however have fallen by 1.6 per cent.

Free cash flow for the six months was down 7.3 per cent to £2.02 billion due principally to lower EBITDA, increased taxation and higher capital additions, offset by lower adverse working capital and higher dividends received.

Operating profit came in at £5.71 billion, down 8.3 per cent year-on-year.