Vodafone said today that revenues jumped to £10.5bn in the last three months of 2008, thanks almost entirely to the fall of sterling against other foreign currencies. As a result, the telecoms giant is now expecting full-year revenues of somewhere between £40.6bn and £41.5bn – a £1.8bn hike from its previous forecast – with operating profits of £11.5bn-£12bn, up about £500m. At a time when its UK revenues are going backwards, at least new Vodafone CEO Vittorio Colao (pictured) can rely on its home territory for something...
On paper, this is a pretty impressive showing – a 14.3% hike on the same period last year. However, the pound’s recent falls – it has plummeted against the dollar, and slumped to record lows against the euro and the yen – have certainly flattered Vodafone’s figures. Stripping out these currency movements, revenue growth was a relatively measly 1.4% in the three months to December, the third quarter of its financial year – and it only ended up in positive territory due to some recent acquisitions in India.
But speaking of India, the mobile operator did have some good news to shout about. Vodafone India gained around 2.1m customers a month during the period (that’s about 70,000 punters a day), taking its total subscriber base above 60m. Vodafone admitted that competition was getting tougher, which has slowed revenue growth slightly – but with 70% of the Indian population still without a mobile phone, there’s clearly an awful lot more room for expansion. South Africa was another success story, enjoying a 15% rise, while even Verizon Wireless (the US firm in which Vodafone owns a 45% stake) was up 12%.
And it’s a good job too, since its core European markets (which still account for 70% of turnover) are starting to look a bit old and tired. UK revenues fell by 0.7%, but Spain was the real laggard: Vodafone said the ‘deteriorating market environment’ had led to ‘increased involuntary churn’ – in other words, lots of people are being cut off for not paying their bills. Nor was the picture universally positive in emerging markets: revenues in Turkey were down nearly 15%, as more and more customers switched to rivals. Vodafone is so worried about its performance there that it’s replaced the entire management team.
However, there was still enough good news in today's results to cheer investors, and Vodafone’s share price is up nearly 7% at time of writing – adding about £4.5bn to its market value. So you see, the falling pound isn’t all bad news...
In today's bulletin:
BP slips up - profits rise 'only' 39%
Vodafone cheers as sterling quarter adds £1.8bn
Football clubs do roaring trade
Fingers in tills: UK fraud cases on the rise
No business likes snow business