Vodafone – Roaming Revenue Rebounds

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Vodafone Group plc (LON:VOD)’s total first quarter revenue for the 2022 financial year rose 5.6% on an organic basis to €11.1bn. Service revenue grew 3.3% organically to €9.4bn.

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At a group level, roaming and visitor revenue grew 56%, but is still another 54% behind its pre-pandemic level. This contributed to growth across most markets.

Vodafone confirmed it is on track to meet full year guidance of underlying cash profits after leases (EBITDAaL) of between €15.0bn and €15.4bn and adjusted free cash flow of “at least” €5.2bn.

The shares rose 3.7% following the announcement.

The Start Of A Roaming Revenue Rebound For Vodafone

William Ryder, Equity Analyst at Hargreaves Lansdown:

“Vodafone’s first quarter marks what we hope is the start of a roaming revenue rebound. Roaming revenue, which is paid when people use their phones abroad, still has some way to go before it’s back to pre-pandemic levels, but a 56% rise helped the group return to service revenue growth this quarter. However, the real challenge is stringing several quarters, and then years, together.

Vodafone has a few genuinely exciting segments, such as M-Pesa which offers mobiles financial services in Africa, and some stalwart markets in Europe like Germany. But there are also several markets in which the group has struggled to differentiate itself and so battles against relentless price competition. The potential is there for long term growth and shareholder value creation, but we’ll want a little more evidence before getting too upbeat.”

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