Vodafone Q2 Revenues Rise by 9.6% to $17.7 Billion

Vodafone has reported that its Q2 revenues were up 9.3% to £10.74 billion (US$17.7 billion), including the positive impact of exchange rate movements of 8.6 percentage points and a 3.1 percentage point benefit from merger and acquisition activity, primarily attributable to the additional stake in Vodacom.

Analysts had predicted £10.66 billion, the average of eight estimates compiled by Bloomberg.

Vittorio Colao, Chief Executive, commented: "In the first quarter the service revenue trend in Europe was consistent with the previous quarter and we continued to see good growth in India and South Africa. Our total communications strategy is delivering well, with organic data revenue up 19% and organic fixed line revenue 7% ahead of the comparative period. Free cash flow generation was strong at £1.9 billion, up 21%. The Group has reaffirmed its guidance for the full year."

Organic data revenue growth was 19.4%, slightly lower than the previous quarter due to the impact of lower data roaming and lower enterprise activity.

In November 2008 the Group announced a cost reduction programme which targeted a £1 billion reduction in operating costs by the end of the 2011 financial year in order to offset the pressures from inflation and the competitive environment and to enable investment in revenue growth opportunities. Savings of more than 65% of this target are expected to be generated by the end of the current financial year.

Capital expenditure of £1.2 billion was at a similar level to the same quarter last year after adjusting for foreign exchange, reflecting continued investment in Europe and in India.

Free cash flow before licence and spectrum payments increased by 21.2% to £1.9 billion primarily due to foreign exchange and the receipt of a £200 million dividend from Verizon Wireless deferred from the previous quarter.

Group net debt decreased to £31.2 billion at 30 June 2009 reflecting free cash flow generated during the period, a £4.1 billion beneficial impact of exchange rate movements on non-sterling denominated debt, the Group's acquisition of an additional 15.0% stake in Vodacom and the full consolidation of Vodacom's net debt following the acquisition.

Posted to the site on 24th July 2009