Telco eyes flat or slightly increased profit as business overhaul continues
Vodafone saw its Group revenue dip 2.3 per cent in the first half of the year due to declines in roaming income and handset sales as a result of the Covid-19 pandemic.
Revenue was €21.427 billion (£19.229 billion) for the period, down from €21.939 billion last year, and adjusted profit fell 1.9 per cent to €7.023 billion. However, operating profit rose significantly from €577 million to €3.472 billion.
The telco has predicted annual profits to be between €14.4 billion and 14.6 billion. The high end of these predictions would be slightly above last year’s €14.5 billion.
Group CEO Nick Read (pictured) described the performance as “resilient”, and emblematic of the company’s digital transformation over the last two years.
“COVID-19 and the reduction in roaming revenues, through the significant reduction in international travel, is currently obscuring our underlying commercial progress, with Q2 service revenue growing by 1.5 per cent excluding roaming,” he said.
“We are now two years into our longer-term strategy to transform Vodafone into a business that enables a digital society, generating both sustainable growth and attractive returns. We are executing at pace, but there remains more to be done to achieve our goal.”
In the UK, Vodafone cited its successes with its VOXI brand, its being the future MVNO provider for Asda Mobile, and an increasing digital transformation campaign that has seen it strategically reduce its retail footprint as positives for the year.
Additionally, its European mobile customer contract churn stands at 12.9 per cent for the half-year, currently down from 14.6 per cent for the whole of last year, while Average Revenue Per User (ARPU) has seen an approximate uplift of €2-5 per month in Italy, the UK and Spain due to the introduction of its speed-tiered, unlimited data markets. Vodafone said it now had over six million active unlimited data customers across the nine markets in which it offered the service.