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Vodafone Group PLC on Tuesday said profit more than doubled in the first half of its current financial year, as its income grew and some costs were reduced.
The Newbury, England-based telecommunications provider said pretax profit for the six months that ended September 30 was €2.11 billion, more than doubling from a restated €830 million a year before.
Results for the first half of 2023 were restated to reflect the results of Vodafone Spain and Vodafone Italy operations being discontinued, having been sold.
Revenue grew 1.7% to €18.28 billion from €17.98 billion, while cost of sales rose 0.8% to €12.12 billion from €12.02 billion. Selling & distribution expenses were up 5.4% to €1.36 billion from €1.29 billion, and administrative expenses increased 5.9% to €2.70 billion from €2.55 billion.
Financing costs, however, fell 40% to €843 million from €1.40 billion, and ’other income’ swung to positive €533 million from negative €67 million a year before.
Adjusted earnings before interest, tax, depreciation, amortisation and adjusted loss was €5.4 billion in the half-year, flat on a year before, though up 3.8% on an organic basis.
Vodafone said an anticipated slowdown in its German market was offset by growth in other European markets, Africa and Turkey.
Vodafone declared an interim dividend of 2.25 euro cents per share, down 50% from 4.50 euro cents last year. Vodafone is targeting a full-year dividend of 4.50 euro cents.
It said this represented a new rebased dividend, which Vodafone have introduced in order to be able to grow dividends over time. The reduced interim dividend was, as a result, set ‘at a sustainable level, which ensures appropriate cash flow cover and sufficient flexibility to invest in the business for growth’.
Chief Executive Officer Margherita Della Valle said: ‘We continue to make good progress on our strategy to change Vodafone. The approval processes for our transactions in the UK and Italy are nearing conclusion. These will complete our programme to reshape the group for growth. We are also investing in Germany to strengthen our market position and taking steps to expand our business-to-business capabilities
‘As we move throughout this year of transition, our results in the first half have been consistent with out expectations and we are reiterating our full-year guidance. We grew service revenue by 4.8% and adjusted Ebitdaal by 3.8%. We delivered good performances across our markets, with the exception of Germany, where we have been impacted as expected by the TV law change.
‘I am confident that the actions we are taking will deliver growth for Vodafone this year and a further acceleration into financial 2026.’
Vodafone reiterated its full-year guidance of around €11.0 billion in adjusted Ebitdaal, relatively flat compared to the €11.02 billion reported for financial 2024.
Vodafone also continues to work with the UK’s Competition & Markets Authority amid its proposed merger with Hutchinson 3G UK, which trades as Three UK, as announced in June this year. Vodafone said it ‘disagrees with the CMA’s provisional findings and have provided them with our response’. The group remains ‘confident that we can work with them to secure approval’, and expects to conclude the merger in early 2025.
Shares in Vodafone were down 4.1% at 70.00 pence each in London on Tuesday morning.
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