But things are on the move with the proposed sale to Zegona in Spain, the possibility of a merger in Italy and the pending one in the UK
Vodafone Group announced its Q2 earnings, reporting a steep drop in operating profit, by 44.2%, to €1.66 billion during the first half, as the group’s revenues slid by 4.3% to €21.94 billion.
However, the operator attributed this to foreign currency exchange rates, and disposing of Vodafone Hungary, Vodafone Ghana and Vantage Towers in the previous financial year.
Better things
On the other hand, group service revenues increased by 4.2% to €19.2 billion, with organic increases in Europe and Africa. Highlights include Germany enjoying a rise of 31% in total sales, rising for the second quarter in a row, by 1.1% over last year to €2.9 billion.
Vodafone Business saw a 4.4% increase in organic service revenues during the six months to the end of September, just clearing €5.1 billion. It achieved organic growth in all segments and markets except Spain.
Growth in digital services, that is, cloud, security, IoT, are growing at double-digit rates, contributing 17% of Vodafone Business’ revenues in H1. The division had 175 million IoT connections at the end of September.
Progress, mostly
Vodafone Group’s CEO, Margherita Della Valle (pictured), commented, “During the first half of the year, we have delivered improved revenue growth in nearly all of our markets and have returned to growth in Germany in the second quarter.
“Vodafone’s transformation is progressing. Our focus on customers and simplifying our business is beginning to bear fruit, although much more needs to be done. We have also announced transactions to strengthen our position in the UK and exit the challenging Spanish market in order to right-size our portfolio for growth.”
Spain, Italy and the UK
The proposed merger of Vodafone UK with Three UK is still dragging on, awaiting regulatory approval. In particular, there are concerns about reducing from four to three operators and about Three UK’s Chinese connection – its parent company is based in Hong Kong.
Vodafone is selling its opco in Spain to British investor Zegona for €5 billion, which when announced at the end of October, failed to move share price dial.
It seems that rebuffing an offer from Xavier Niel’s Iliad Group in February 2022 hasn’t dulled Iliad’s interest. Now Reuters reports that a merger could be brewing in Italy, which along with Spain, the CEO identified as needing to be addressed earlier this year.
Della Valle said of Italy, “We are considering a range of options. We don’t have deadlines, we don’t have time lines.”