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Vodafone Stock Down On Weak Q1 Revenues; Backs Earnings View; Vantage Towers IPO On Track

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Shares of Vodafone Group Plc were losing around 5 percent in London trading after the telecom major reported Friday weak revenues in its first quarter, and maintained its 'flat to slightly down' adjusted EBITDA outlook for fiscal 2021. The company also reiterated its fiscal 2021 guidance for at least 5 billion euros of free cash flow.

Separately, Vodafone announced the launch of Vantage Towers, a European tower infrastructure platform, which supports digitalisation by establishing and maintaining extensive, high quality and resilient networks. The company is on track for an Initial Public offering or IPO in early 2021, targeting a Prime Standard Listing in Frankfurt.

The Germany-based platform will have over 68,000 towers across 9 markets. Vantage Towers is led by Vivek Badrinath as Chief Executive Officer, Thomas Reisten as Chief Financial Officer and Sonia Hernandez as CCO.

The company announced potential to include Vodafone's 50 percent stake in CTIL, a tower infrastructure company in the UK, with 14,300 towers and 50 percent share of estimated FY20 pro forma adjusted EBITDA, amounting to 50 million euros to 70 million euros.

The company also announced the merger of Vodafone's and Wind Hellas' towers businesses in Greece, which creates the leading tower infrastructure company in Greece.

Vodafone had set out its three-phase plan for its tower assets in July 2019.

For the first quarter, Vodafone's total revenues were 10.51 billion euros, compared to 10.65 billion euros in the previous year. Total revenue declined 2.8 percent on an organic basis mainly due to COVID-19 impacts.

Total service revenue was 9.11 billion euros, up 1.3 percent on a reported basis, but down 1.3 percent organically. The company noted that COVID-19 crisis had a significant impact on service revenue in its first quarter with roaming and visitor declines.

Service revenue in Europe grew 6.6 percent, mainly driven by 25.4 percent growth in Germany. Vodacom service revenue, meanwhile, dropped 11.9 percent and revenue from other markets fell 18.9 percent.

Nick Read, Group Chief Executive, said, "Whilst we have seen the direct impact on our revenue from travel restrictions and business project delays, we have also seen increased usage in voice and data, alongside record NGN broadband customer net additions in Europe."

In London, Vodafone shares were trading at 121.94 pence, down 5.33 percent.

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