Market reacts favorably to Vodafone’s Q1 trading statement

[MongiIG]

A better than expected trading statement from Vodafone is met with investor favour.

Source: Bloomberg

 

Shares Vodafone M-Pesa Revenue Europe Money

 Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Friday 23 July 2021 

Vodafone Q1 2021 Trading Statement

Vodafone the Europe, Africa, Middle East and Asia Pacific telecommunications provider has seen revenue rebound in quarter one (Q1) 2022, as Covid-19 restrictions ease, signaling improving economic conditions particularly in Europe. The group has also highlighted gains in its African operations, most notably from the M-Pesa mobile money offering.

For Q1 (of fiscal year 2022), Vodafone has guided via a trading statement that revenue had increased by 5.7% year on year (YoY) to €11.1 billion. Service revenue for the group increased by 3.3% over the period

Vodafone has also guided that for the financial year 2022 (FY22), the company expects to achieve full-year targets of €15 billion to €15.4 billion in adjusted earnings as well as a minimum of €5.2 billion in free cash flow.

Find out more on how to buy, sell or short Vodafone shares.

Vodafone performance across Europe mostly improved

In Europe, the group has managed to achieve marginal growth of 1.4% in its operations across Germany. The UK and Spanish markets saw a quarter on quarter (q/q) return to growth, while the group’s Italian operations saw a revenue contraction of around 3.6%.

Vodafone’s mobile money offering in Africa gains traction

In countries Kenya, Tanzania, Mozambique, Lesotho and the Democratic Republic of Congo, the group has seen significant growth through its M-Pesa platform, which allows users to facilitate peer to peer transactions. The platform has seen a surge in usage with transactions via the platform having increased by 45% to 4.5 million from the prior year’s comparative period. This service is now looking to extend into new financial products such as loans, payrolls and savings.

Vodafone share price – technical analysis

Source: IG charts

 

The share price of Vodafone has reacted favorably to the Q1 trading statement release, rebounding off the 112.30 support level. The price reversal off support is accompanied by the Stochastic oscillator moving out of oversold territory.

These are short term bullish indications suggestive of continued gains with 131.80 the next upside resistance target considered.

In summary

• Q1 2022 revenue increased by 5.7% year on year to €11.1 billion
• Service revenue for the group increased by 3.3% over the period.
• Vodafone has seen revenue growth in across most of Europe, with the exception of Italy
• In the group’s African operations, the M-Pesa mobile money platform has seen a 45% increase in transactions
• The share price of Vodafone is currently rebounding off support and from oversold territory