Vodafone has reported a rise in half-year revenue to €19.6 billion, up 7.3% on the same period last year, as its troubled German business returned to growth and trading in the UK, Africa and Türkiye continued to improve.

The telecoms group published its first-half results on Tuesday 10 November. Service revenue, the money earned from customers using its networks, rose 8.1% to €16.3 billion, or 5.7% on an organic basis, which strips out currency movements and changes to the shape of the group.

Growth was helped by the consolidation of Three UK following the merger of Vodafone's UK business with Three, although adverse foreign exchange movements partly offset the increase, the company said.

Germany returns to growth

Germany, Vodafone's largest market, was the centre of attention for investors. Service revenue there returned to growth in the second quarter, after a long period in which the business was held back by the end of a German TV law change that had allowed landlords to bundle TV services into rent.

Chief executive Margherita Della Valle said: "In the second quarter, we saw service revenue accelerating, with good performances in the UK, Türkiye, and Africa, and a return to top-line growth in Germany."

Growth in Germany was modest, at 0.5%, and was driven by the end of the TV law change impact and higher wholesale revenue, according to trade publication Data Centre Dynamics.

Vodafone Business, the group's corporate arm, grew revenue by 2.6% in the half year, or 3.4% on an organic basis, supported by strong demand for digital services.

Profits fall despite higher sales

Adjusted EBITDAaL, the group's preferred measure of underlying earnings, increased by 5.9% to €5.7 billion, or 6.8% on an organic basis. Operating profit, however, fell 9.2% to €2.2 billion, as higher depreciation and amortisation from the consolidation of Three UK and lower other income offset the earnings growth.

Profit for the financial period fell to €1.05 billion from €1.22 billion a year earlier. Basic earnings per share from continuing operations were 3.38 eurocents, down from 3.92 eurocents, while adjusted basic earnings per share rose to 6.92 eurocents from 4.84 eurocents.

UK and Africa in focus

The UK business is one which the group is aiming to strengthen. Its merger with Three UK recently moved further forward as Vodafone announced it would take full ownership of VodafoneThree, buying out the 49% stake held by CK Hutchison for £4.3 billion.

Africa, which accounts for about a fifth of group income, also remained a source of growth. The group has increased its stake in Safaricom to 55%, a move that has resulted in upgrades to annual earnings and cash flow numbers, according to interactive investor.

The first quarter had set a strong pace, with total revenue up 9.7% to €10.3 billion and service revenue up 9.8% to €8.6 billion. Investors had been watching whether that momentum would last into the half year, and whether Germany could sustain its return to growth.

Shares in Vodafone have risen by about 35% over the last year and by 63% over the last two years, as investors have warmed to the group's transformation, interactive investor noted before the results.

Vodafone said it had delivered good operational progress against its strategic priorities in the first half, giving it further confidence in generating sustainable adjusted free cash flow growth over the medium term.