VOD Vodafone Group PLC

   By Adria Calatayud 
 

Vodafone Group PLC said Friday that revenue rebounded in the first quarter of fiscal 2022, recovering from the hit caused by the coronavirus pandemic last year, and said it is on track to meet its expectations for the full year.

The U.K.-based telecommunications group said service revenue--a key metric in the telecom sector--returned to growth in Europe for the three months to June 30 and continued its positive trend in Africa, as both its consumer and business-facing segments contributed to the rise.

Revenue for the quarter was 11.10 billion euros ($13.07 billion) compared with EUR10.51 billion for the same period last year. On an organic basis, Vodafone's first-quarter revenue grew 5.6% on year.

Vodafone's organic service revenue grew 3.3% in the quarter, accelerating from a 0.8% increase in the previous quarter. In Germany, Vodafone's largest market, service revenue was up 1.4%.

Shares at 0724 GMT were up 2.9% at 119.44 pence ($1.64).

The company said European commercial activity hasn't yet returned to pre-pandemic conditions, and that lower international travel maintained its roaming revenue below levels experienced before Covid-19 struck.

"In Europe, the operating and retail environment has not yet returned to normal conditions, but we are delivering a good service revenue performance," Chief Executive Nick Read said.

Vodafone's first-quarter organic service revenue fell in Italy by 3.6% amid intense competition, but returned to growth in the U.K. and Spain.

The company said roaming and visitor revenue grew 56% on year, but is still sharply below pre-pandemic levels.

Interactive Investor Head of Markets Richard Hunter said the reduction in roaming and visitor revenue has been a thorn in the side of late for Vodafone and that it is unlikely to go away soon.

"The improvement is likely to continue, but there is clearly some way to go before the issue can be eliminated from dragging on profits," Mr. Hunter said.

Vodafone said it is on track to deliver its guidance for adjusted earnings before interest, taxes, depreciation and amortization--the company's preferred profit metric, which strips out exceptional and other one-off items--for fiscal 2022 of between EUR15.0 billion and EUR15.4 billion, with an adjusted free cash flow of at least EUR5.2 billion.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

July 23, 2021 03:57 ET (07:57 GMT)

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