Vodafone swings to £1.84 billion of pre-tax profit in the fiscal first half

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Nov 16, 2020
  • Vodafone swings to £1.84 billion of pre-tax profit in the fiscal first half.
  • The British multinational reports a 1.9% decline in adjusted EBITDA.
  • Vodafone forecasts up to £13.08 billion of adjusted EBITDA for the full year.

In a report on Monday, Vodafone Group plc (LON: VOD) said it concluded the fiscal first half in profit. The company also expressed confidence that its full-year performance will remain resilient. In the previous fiscal year, Vodafone had posted £13.09 billion of core earnings, as per the report published in May.  

Vodafone shares opened more than 3.5% up on Monday. The stock is now trading at £1.23 per share after recovering from a year to date low of 98 pence per share in March, when the impact of COVID-19 was at its peak. In comparison, the British multinational telecommunications company had a per-share price of £1.47 at the start of the year.

Vodafone reports a 1.9% decline in adjusted EBITDA

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In the six months that concluded on 30th September, Vodafone reported £1.84 billion of pre-tax profit as compared to £457.85 million of loss in the same period last year, when it took a hit due to Vodafone Idea Ltd.

The world’s second-largest mobile operator said that its adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) printed at £6.29 billion that represents a 1.9% annualised decline. In a statement last week, Vodafone said that it plans on raising £3.79 billion in towers IPO next year.

Vodafone said that its service revenue came in 0.4% lower in the second quarter due to the ongoing COVID-19 crisis. In the prior quarter, its service revenue had tanked by 1.3%. H1 revenue as a whole stood at £19.20 billion versus the year-ago figure of £19.66 billion.

For the full fiscal year, the Berkshire-based company said that it now forecasts its adjusted EBITDA to fall in the range of £12.90 billion and £13.08 billion. Vodafone also declared £4.03 of interim dividend per share on Monday that remained unchanged from last year.

CEO Nick Read’s comments on Monday

Vodafone also said in its report that free cash flow was likely to print at £4.48 billion this year. CEO Nick Read commented on the report on Monday and said:

“The results demonstrate the success of our strategic priorities to date, namely increasing customer loyalty, growing our fixed broadband base, driving digitisation to simplify the company and capture significant cost savings, and deliver 5G efficiently through network sharing.”

Vodafone performed slightly downbeat in the stock market last year with an annual decline of close to 5%. At the time of writing, it is valued at £32.15 billion.

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