Vodafone Drops As Revenue Growth Pressured by FX Headwinds

Vodafone Group (LON: VOD) reported mixed results for the first half of FY25, sending its share price lower in early Tuesday trading.

The telecommunications giant has seen its shares slide around 4.5% so far in the session.

While service revenue grew organically by 4.8% (1.7% on a reported basis) to €15.1 billion, adverse foreign exchange movements impacted growth. Overall revenue increased by 1.6% to €18.3 billion, with the company noting that service revenue growth was partially offset by adverse foreign exchange movements.

In Germany, service revenue declined 6.2% in Q2 due to the impact of a new TV law. However, the company has actively retained a significant number of households, mitigating the impact.

Business service revenue rose 4% in Q2, driven by increased demand for digital services. Organic service revenue growth in Africa was 9.7% in Q2, continuing to be a growth driver, with consistent service revenue growth supported by price increases and rising demand for data and financial services.

Operating profit increased 28.3% to €2.4 billion in H1, primarily due to a one-time gain from the sale of an Indus Towers stake. Adjusted EBITDAaL remained relatively stable.

Vodafone reiterated its full-year FY25 guidance for adjusted EBITDAaL and adjusted free cash flow of around €11 billion and €2.4 billion, respectively.

“We continue to make good progress on our strategy to change Vodafone. The approval processes for our transactions in the UK and Italy are nearing conclusion. These will complete our programme to reshape the group for growth. We are also investing in Germany to strengthen our market position and taking steps to expand our B2B capabilities,” commented Margherita Della Valle, Vodafone's CEO.

“I am confident that the actions we are taking will deliver growth for Vodafone this year and a further acceleration into FY26.”