16th Jul 2025 10:51
(Alliance News) - Zegona Communications PLC on Wednesday issued its first earnings report since its mammoth acquisition of Vodafone Spain, showing a loss, partly due to takeover costs, though it said it has returned the Spanish telecommunications operator to growth "for the first time in years".
Also known as Vodafone ONO SAU, the former Spanish division of Newbury, England-based Vodafone Group PLC was purchased in May 2024 for EUR5 billion by Zegona, then a cash shell. The London-based investor focuses on Europe's telecommunications, media and technology sectors and had recently sold its previous operations.
Zegona on Wednesday posted EUR3.00 billion in revenue for the 15 months that ended March 31, compared to none reported in 2023. Due to acquisition costs, Zegona's pretax loss widened to EUR450.0 million in the 15-month period from EUR15.6 million during the prior 12-month period.
Vodafone Spain had estimated revenue of EUR3.6 billion in the 12 months that ended March 31, compared to GBP3.9 million the year before. During the same 12-month period, operating cash flows were EUR625 million.
In the three months that ended June 30, revenue was EUR895 million, up from EUR871 million the same period of financial 2025. This marks the first time since 2022 that Vodafone Spain has reported first-quarter revenue growth. During the same three months to June 30, operating cash flows were EUR201 million.
In the first quarter of financial 2024, Vodafone Spain's revenue was down 3.0% on-year, the same pace of decline as in the first quarter of financial 2023 and after a marginal rise in the first quarter of financial 2022.
Zegona hailed its consolidation efforts. This included cutting 28% of Vodafone Spain's workforce, which Zegona cited for improved margins. During the 12 months that ended March 31, Vodafone Spain reported EUR1.2 million in earnings before interest, tax, depreciation and amortisation after leases. This compares to a loss of EUR204 million the year prior.
In February this year, Vodafone Spain partnered with Madrid-based Telefonica SA to form Compania Mayorista de Fibra SL, providing broadband access for the retail and wholesale sectors. Vodafone Spain owns 37% of the joint company, while Telefonica holds the remaining majority.
Bloomberg in June reported that Telefonica was discussing a possible deal for Vodafone Spain with Spanish peer MasOrange, half-owned by Orange SA. The talks included the possibility of Telefonica acquiring Vodafone Spain and breaking it up to avoid antitrust violations. MasOrange is considering buying Lowi, Vodafone Spain's low-cost offering, though Bloomberg noted that no formal proposals had been made.
Back in January, Vodafone Spain and MasOrange had entered a binding contract to create a new fibre network company in Spain. FibreCo will bring together network assets of Vodafone Spain and MasOrange to create a 100% fibre-to-the-home network covering 12.2 million premises across Spain.
In Zegona's annual report released on Wednesday, the assets and liabilities that will be transferred out of the company as part of the MasOrange deal were shown as 'held for sale'.
Zegona shares were 0.5% higher at 744.00 pence on Wednesday morning in London for a GBP5.67 billion market capitalisation.
Vodafone was up 1.1% to 81.71 pence in London, Orange was up 0.8% at EUR13.17 in Paris. Telefonica was up 0.8% at EUR4.53 in Madrid.
By Holly Munks, Alliance News reporter
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