16th Nov 2021 08:35
(Alliance News) - Vodafone Group PLC on Tuesday slightly raised its annual outlook after a first half revenue improvement, helped by decent trading in Germany, the Berkshire, England-based telecommunications firm's largest market.
Vodafone shares were 4.4% higher at 117.44 pence each in London on Tuesday morning, the best large-cap performer.
Vodafone lifted is adjusted free cash flow guidance, and also raised the lower end of its adjusted earnings before interest, tax, depreciation, amortisation and after leases range.
In the six months to September 30, revenue improved 5.0% year-on-year to EUR22.49 billion from EUR21.43 billion. Service revenue alone was 2.8% higher annually at EUR19.01 billion.
Pretax profit, however, dropped 34% to EUR1.28 billion from EUR1.47 billion a year earlier. Vodafone posted EUR108 million in "other expenses", swinging from a EUR1.06 billion gain a year prior.
Adjusted Ebitda after leases - which doesn't include the 'other' charge - grew by 7.9% to EUR7.57 billion from EUR7.01 billion, a 6.5% rise on an organic basis.
Chief Executive Nick Read said the company saw "good sustainable growth and solid commercial momentum".
"Our strengthened performance in Africa and Europe puts us on track to be at the top end of our guidance for this year, as well as firmly within our medium-term financial ambitions," Read added.
Germany was the largest revenue contributor again. Revenue in Germany rose 1.2% year-on-year to EUR6.45 billion.
"Our commercial momentum started to improve during the second quarter, reflecting a gradual recovery in retail footfall, however it is still below pre-pandemic levels. We added 86,000 cable customers during the period, including 38,000 migrations from legacy DSL broadband," Vodafone said on its fortunes in Germany.
Vodafone left its dividend interim unchanged at 4.50 cents.
Vodafone narrowed its full-year adjusted Ebitda after leases guidance to EUR15.2 billion to EUR15.4 billion, the top end of its prior range of EUR15.0 billion to EUR15.4 billion. Adjusted free cash flow guidance was upgraded to at least EUR5.3 billion, from at least EUR5.2 billion.
Vodafone is also looking to EUR750 billion in European Union funding programmes, as part of the bloc's Recovery & Resilience facility.
"Of these grants, approximately 70% will be allocated to European Union member states in which Vodafone has an operating presence. These grants are planned to be 70% committed by the end of 2022. The range of funding presents a direct and indirect opportunity given that at least 20% of the total funding is planned to support the European Commission's digital transformation agenda," the company noted.
Vodafone added that it is "tracking the progress" of funding applications.
By Eric Cunha; [email protected]
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