Vodafone Group has reported an operating profit of €1.54bn for the first quarter of the fiscal year 2025 (Q1 FY25), an increase of 43%, compared to €1.08bn for the same quarter of the previous fiscal year. In the previous quarter, that is Q4 FY24, the British telecommunications group posted an operating profit of €3.6bn.
Vodafone’s total revenue in the reported quarter ended 30 June 2024 was €9.04bn, an increase of 2.8% year-over-year (YoY), compared to €8.79bn reported in the same quarter of FY2024. The group’s adjusted earnings before interest, taxes, depreciation, amortisation, and adjusted loss (EBITDAaL) for Q1 FY25 was up by 2.1% to €2.68bn, compared to €2.62bn in Q1 FY24.
Vodafone’s services segment posted a net revenue of €7.46bn in the reported quarter, a 3.2% increase compared to €7.23bn in the corresponding quarter of the previous fiscal year. However, the group’s service revenue in Germany dropped 1.5% for the reported quarter owing to the impact of the Multi Dwelling Unit (MDU) TV law change. The British company expects to achieve an adjusted EBITDAaL of approximately €11bn and an adjusted free cash flow of at least €2.4bn in the current fiscal year.
Vodafone stated that its business service revenue increased to 2.6% in the reported quarter. In the UK, Vodafone reported total revenue of €1.7bn for the reported quarter, remaining flat compared to the €1.68bn recorded in the same quarter of the previous fiscal year. Service revenue for Q1 FY25 in the UK amounted to €1.43bn.
Vodafone noted that while there was growth in business service revenue in the UK, this was offset by a decline in mobile revenue, primarily due to lower inflation-linked price increases.
In the rest of Europe, Vodafone’s total revenue increased by 3.8%, driven by higher service and equipment sales. Vodafone Group chief executive Margherita Della Valle said: “We continue to deliver strong revenue growth in Africa and Turkey, whilst lower inflation is slowing revenue growth in Europe and accelerating Group EBITDAaL growth.
“Service revenue for the Group grew 5.4%, although in Germany we saw an expected service revenue decline, following the ongoing impact of the TV law change.
“During the last few months, we have announced the final step in reducing our stake in Vantage Towers to 50% for €1.3bn and commenced our €2bn share buyback programme following the sale of Spain.”
Three UK merger expected soon
In June 2023, Vodafone signed a deal to merge its UK telecommunications business with CK Hutchison’s unit Three UK. The deal is aimed at creating a sustainable and competitive third-scale network operator in the UK. Expected to close around the end of 2024, the deal is currently undergoing an in-depth Phase 2 investigation by the UK’s Competition and Markets Authority (CMA).VIEW ALL NEWSLETTERS Sign up to our newslettersData, insights and analysis delivered to youBY THE TECH MONITOR TEAMSIGN UP HERE
Della Valle has been working on a turnaround plan for Vodafone, which includes a major restructuring effort along with the Three UK merger. The strategy focuses on streamlining operations in Europe and Africa, enhancing customer experience, and improving business performance, particularly in Germany. To achieve this, Vodafone is divesting non-core assets, including its Italian and Spanish divisions, and plans to reduce its workforce by 11,000 over three years.
Read more: Vodafone commits to selling a chunk of spectrum to guarantee merger with Three
