Vodafone Group PLC (LSE:VOD) said it achieved a good performance in line with expectations in the third quarter, with UK revenue boosted by higher roaming and visitor numbers as travel resumed after the easing of pandemic restrictions.
The mobile phone giant reaffirmed its guidance for its current financial year, forecasting underlying earnings (adjusted EBITDAaL) of between €15.2bn- €15.4bn and adjusted free cash flow of at least €5.3bn.
Group service revenue grew by 2.7% in the third quarter, compared with 2.4% in the previous three months, reflecting growth in both Europe and Africa, Vodafone said in a trading update.
In the UK, service revenue increased by 0.9%, compared with 0.6% growth in the second quarter, driven by higher roaming and visitor revenue as well as growth in the mobile virtual network operator (MVNO) business.
However, there was a further slowdown in the UK Business division, following average revenue per unit (ARPU) pressure on re-contracting multinational corporations and the termination of an unprofitable multinational contract in the second quarter.
The company added 152,000 mobile customers in the UK in the third quarter, while broadband customers increased by 29,000.
In Germany, service revenue grew by 1.1%, compared with 1% in the second quarter, as acceleration in Business revenue was partially offset by lower variable call usage revenue.
Retail activity in Germany continued to be significantly impacted by the COVID-19 pandemic, as restrictions tightened during the third quarter after the emergence of omicron. Customer footfall in December was 50% below pre-pandemic levels.
In Africa, the Vodacom business saw total service revenue growth of 4.4% in the third quarter, compared with 3.1% in the prior three months, with growth in both South Africa and Vodacom's international markets.
"Our team has delivered another solid quarter, demonstrating the sustainability of our growth strategy and medium-term ambition. This performance keeps us firmly on track to deliver FY22 results in line with the higher guidance we set out in November," said Vodafone CEO Nick Read.
"We remain focused on our operational priorities to strengthen commercial momentum in Germany, accelerate our transformation in Spain and position Vodafone Business to maximise EU recovery funding opportunities. We are also committed to creating value for our shareholders through proactive portfolio actions and continuing to improve returns at pace."
Shares rose 2.36% to 130.98p in opening trade.