Vodafone reiterates full-year outlook as revenue rebounds in Q1

Vodafone Group plc (LON: VOD) said signs of recovery were evident in the fiscal first quarter after a massive hit from the Coronavirus pandemic as revenue topped the year-ago figure. The company also expressed confidence on Friday that it will meet its full-year guidance.

Q1 financial performance

Vodafone reported £9.51 billion of revenue in Q1 – an increase from £9.0 billion in the same quarter last year. Its organic revenue noted a 5.6% annualised growth. Shares of the company are a little under 4% up on Friday.

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The British multinational’s organic service revenue in the recent quarter jumped 3.3%. Its largest market, Germany, noted a 1.4% increase in service revenue. Organic service revenue returned to growth in some parts of Europe like Spain and the United Kingdom but slid 3.6% in Italy.

Commenting on the quarterly numbers, CEO Nick Read said:

“In Europe, the operating and retail environment has not yet returned to normal conditions, but we are delivering a good service revenue performance.”

Also on Friday, CEO Read hinted at a spin-off of the company’s African mobile money platform M-Pesa.

Other notable figures and full-year guidance

Other notable figures in the financial update on Friday include a 56% year over year growth in roaming and visitor revenue that still came in significantly lower than the levels seen before the pandemic. According to Interactive Investor’s Richard Hunter, roaming and visitor revenue will take time to recover completely.

For fiscal 2022, Vodafone expects its adjusted EBITDA to fall in the range of £12.85 billion to £13.19 billion and forecasts £5.2 billion of adjusted free cash flow.

Last year, the telecommunications company wanted to sell a 55% stake in Vodafone Egypt to Saudi Telecom Company but pulled out of the deal in late December. At the time of writing, Vodafone is valued at almost £33 billion and has a price to earnings ratio of 370.12.