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Vodafone share price surges even as telco slumps to half-year loss

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Shares in Vodafone (LON:VOD) have surged in London this morning, even as the telecoms giant recorded a loss for the first half of its financial year. The company, however, lifted its free cash flow outlook and left its payout to shareholders unchanged.

As of 08:31 GMT, Vodafone’s share price had added six percent to 153.02p. The shares are lending support to the benchmark FTSE 100 which is currently 0.49 percent better off at 7,087.99 points.

Vodafone posts half-year results

Vodafone announced in a statement this morning that its revenue had fallen 5.5 percent in the first half of its financial year to €21.8 billion. The group further recorded an interim loss of €7.8 billion, as compared with a half-year profit of €1.24 billion in the prior-year period. The telecoms group attributed this year’s result to a loss on the disposal of Vodafone India, following the unit’s merger with local provider Idea Cellular, and impairments.

The blue-chip group, however, maintained its interim dividend at 4.84 eurocents per share, noting that it expects its full year dividend per share to be in line with last year.

“Our performance in the majority of our markets has been good during the first half of the year, and we have taken decisive commercial and operational actions to respond to challenging competitive conditions in Italy and Spain,” Vodafone’s new chief executive Nick Read commented in the statement, adding that the company was confirming the mid-point of its EBITDA guidance range, “with an increased outlook for free cash flow generation”.

Analysts weigh in on telco

The Financial Times reports that analysts at AJ Bell reckon that concern about the dividend was one of the reasons Vodafone shares have been “such a horror” this year. While the company was trying to reassure on cash flow, what has “got people spooked is the Liberty Global deal”.

Earlier this month, news emerged that a business group representing German broadband providers had recently called on EU regulators to block the UK group’s acquisition of Liberty Global’s German operations, with Brussels set to rule on the deal by November 27.

As of 09:08 GMT, Tuesday, 13 November, Vodafone Group plc share price is 153.90p.

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