Vodafone IMS

Vodafone the second largest ( behind China Mobile) mobile telecoms company in the world. I have a holding in my income portfolio (epic code: VOD).

Vodafone released their third quarter IMS yesterday and stated that Group organic service revenue declined 4.8% with Europe down 9.6% and AMAP up 5.5%.


Emerging market service revenue growth included - India +13.2%, Turkey +3.9%, and Vodacom +3.5%.


Conditions in Europe remain challenging with organic service revenue declines of UK -5.1%, Germany -7.9%, Spain -14.1% and Italy -16.6%.


Free cash flow of £1.0bn in the quarter was £0.2bn lower than LY due principally to increased capital expenditure that was £0.3bn higher.


Net debt including joint ventures was £31.5bn, an increase of £5.8 billion in the quarter following the acquisition of 76.6% of KDG for £7.0bn including acquired debt. Net debt excluding joint ventures was £29.8bn.  Following the disposal of their share in Verizon Wireless this net debt position will decline by just over $20bn. 


They state that performance remains in line with expectations and they remain on target to deliver adjusted operating profit of around £5bn and free cash flow in the £4.5- £5.0bn range.


With no end in sight to the weakness in Europe, that still accounts for around 70% of revenue, Vodafone have a tough task ahead of it post the sale of Verizon Wireless, but at least their balance will have been reinforced by the proportion of the proceeds that they are retaining.