Vodafone Q3 Revenue Declines

(RTTNews) - British telecom giant Vodafone Group Plc (VOD.L, VOD) Thursday reported 1.5 percent decline in third-quarter revenue on a reported basis, while it fell 2.9 percent organically. The company noted that environment in Europe remains challenging and it continued to experience intense macroeconomic, regulatory and competitive pressures in the period.

However, Vodafone said performance of the Group remains in line with its expectations.

Looking ahead, the company said it is optimistic that its revenue performance will begin to improve due to easing of regulatory headwinds and improved customer appetite for video and content services.

In an interim management statement for the third quarter ended December 31, 2013, the company noted that its shift to 4G is gaining momentum and has seen improving mobile customer net addition trends.

Vittorio Colao, chief executive of the company said, "Our emerging market businesses are growing strongly, supported by consistent execution and accelerating demand for data."

Further, Vodafone stated that following completion of the Verizon Wireless transaction, it will be very attractively positioned, with a strong balance sheet, improved dividend cover and financial and strategic flexibility to make further investments in the business or returns to shareholders in the future.

For the third quarter, the Group posted revenues totaling 9.59 billion pounds. Service revenues were 8.71 billion pounds, down 1.7 percent on a reported basis, and 3.1 percent organically.

On management basis, revenue declined 3.6 percent to 10.98 billion pounds, which included a 2.1 percentage point impact from adverse foreign exchange movements and a 2.8 percentage point positive impact from M&A and other activity. Service revenue fell 3.3 percent to 9.86 billion pounds.

According to the company, Emerging markets continued to generate strong organic growth, helped by rapidly increasing mobile internet users and data usage.

In Europe, organic service revenue fell 9.6 percent in the quarter, or 7 percent excluding the impact of mobile termination rate, or MTR cuts. Organic service revenue in AMAP region grew 5.5 percent, with continued strong revenue growth across majority of the company's markets.

Mobile customers as at December 31, 2013, increased to 419.40 million from 411.46 million as at October 1, 2013.

The Group said it remains on target to deliver adjusted operating profit of around 5 billion pounds, and free cash flow in the 4.5 billion pounds to 5 billion pounds range, based on the pro forma guidance given on September 2, 2013. VOD.L is currently trading at 221.81 pence, up 5.91 pence or 2.74 percent, on a volume of 48.13 million shares.