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Vodafone Group PLC on Wednesday said ‘we can do better’ as it reported that growth slowed in the third-quarter.
Shares in the telecommunications firm traded 2.5% lower at 90.83 pence each in early dealings in London on Wednesday.
On an organic basis, service revenue rose 1.8% on-year during the quarter ended December 31. It had risen 2.5% yearly in the second quarter.
On a reported basis, service revenue was 1.3% lower on-year at €9.52 billion from €9.65 billion. Total revenue amounted to €11.64 billion, down 0.4% from €11.68 billion a year earlier, but up 2.7% on an organic basis.
Organic service revenue fell 1.8% in the key market of Germany. In Italy, it declined 3.3% and in Spain, it slumped 8.7%. In the UK, however, organic service revenue increased 5.3% year-on-year. In the ’other Europe’ region, it was 2.1% higher. That region includes nations such as Portugal, Ireland and Greece.
‘Although we’re continuing to target our financial guidance for the year, the recent decline in revenue in Europe shows we can do better. We need to do more for our customers by delivering quality connectivity in an easy way. We’ve already taken action, including simplifying our structure to give local markets full autonomy and accountability to make the best commercial decisions for their customers,’ Chief Executive Margherita Della Valle said.
Della Valle became chief executive at the start of the year, replacing Nick Read who departed after just over four years in the top job.
Vodafone backed yearly guidance, expected adjusted earnings before interest, tax, depreciation, amortisation and after leases between €15.0 billion and €15.2 billion. At best, that would be around the €15.21 billion achieved in financial 2022.
Vodafone also expects adjusted free cashflow of around €5.1 billion, which would be down around 6.2% from €5.44 billion the year prior.
CEO Della Valle added: ‘We now have initiatives underway to generate around half of our €1 billion cost savings target. There is more to do and our focus is to provide a better service to our customers, become a simpler business and deliver growth.’
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