Vodafone maintains dividend as the company meets full-year core earnings expectations

In its announcement on Tuesday, Vodafone Group (LON: VOD) said that its full-year core earnings came in line with the expectations of a 2.6% increase to £13.09 billion. The company, however, cited the rising Coronavirus uncertainty for not providing earnings guidance for the current year. As per Vodafone:

“We are experiencing a direct impact on our roaming revenues from lower international travel and we also expect economic pressures to impact our customer revenues over time. However, we are also seeing significant increases in data volumes and further improvements in loyalty, as our customers place value on the quality, speed, and reliability of our networks.”

Vodafone said that the impact of COVID-19 on its financial performance in fiscal 2021 is likely to be more pronounced. The world’s 2^nd largest mobile operator hinted that its core adjusted earnings are likely to remain flat or marginally dive in the current year based on the impact analysis of the Coronavirus pandemic on the global economy.

Vodafone’s net loss contracts significantly

In the year that ended on 31^st March, Vodafone posted £698 million in pre-tax profit as compared to a £2.29 billion loss in the same quarter last year. In terms of net loss, the company recorded £808 million versus the year-ago figure of £7.05 billion. On a year over year basis, Vodafone’s revenue came in 3% higher at £39.50 billion, but it fell short of the experts’ forecast of £39.90 billion in full-year revenue.

Vodafone’s free cash flow climbed 4.7% in fiscal 2020 to £5.01 billion. In the current year, the company said that its free cash flow will be at least £4.39 billion.  

CEO Nick Read of Vodafone had previously slashed the company’s dividend last year from 13.2 pence per share to 7.91 pence per share. The move was aimed at supporting the company’s balance sheet. On Tuesday, the company did not announce any further cut on its full-year dividend and maintained the payout at 7.91 pence a share.

Vodafone reports a 65% to 75% drop in roaming

In Europe, Vodafone currently has 25 million broadband customers and 65 million mobile contracts. As Coronavirus brought the global travel and tourism industry to a near halt, the mobile operator saw a 65% to 75% decline in roaming in Europe last month.

Other noticeable figures in Vodafone’s report include a 70% decrease in fixed-line usage and a 15% increase in mobile data in some markets. Vodafone also noted a 4-5% decline in customer churn that fuelled an around 40% decline in new gross consumer additions.

The £32.85 billion company is currently 17% down year to date.