- The group had posted organic declines for the previous two quarters
- Growth was bolstered by improvements in Vodafone's largest German market
Telecoms giant Vodafone (VOD) has returned to service revenue growth after two quarters of pandemic-induced declines, buoyed by improvements in its biggest market Germany.
The FTSE 100 group said on Wednesday that lockdowns had prompted greater reliance on its networks, taking data traffic to unprecedented levels. At the same time, the blow to roaming revenues was smaller than endured in previous periods as Covid-19 scuppered international travel.
Organic service revenue rose 0.4 per cent to €9.4bn for the third quarter ending 31 December, with Germany up 1 per cent to €2.9bn and the group’s Vodacom business up 3.3 per cent to €1.1bn. By comparison, total organic service revenue dipped 0.4 per cent in the second quarter and 1.3 per cent in the first.
Vodafone reiterated its full-year guidance, expecting adjusted cash profits to land between €14.4bn-€14.6bn with free cash flow of at least €5bn before factoring in spectrum and restructuring costs. The group added that the anticipated initial public offering of Vantage Towers, its masts business, is on track for early 2021. The IPO will take place in Frankfurt; an unsurprising choice of location while Germany comprises an increasing proportion of the group’s sales following the acquisition of various Liberty Global assets.
Shares in Vodafone rose more than 4 per cent on release of its third-quarter figures, changing hands at 133p at the time of writing. They have fallen roughly a tenth over the past 12 months. Hold.
