Vodafone opts to keep dividend but scraps guidance amid Covid-19
The telecoms company surprised investors by holding onto its dividend, with it managing to narrow its losses despite the economic fallout from the coronavirus crisis.
However, the telecoms company was forced to scrap its forward-looking 2021 guidance, with the business admitting that it is too difficult to anticipate the impact the coronavirus outbreak will have on its overall performance over the next 12 months.
‘Vodafone has delivered a good financial performance - growing revenue, adjusted EBITDA [earnings before interest, taxes, depreciation and amortisation] and free cash flow – whilst building strong commercial momentum through the year and executing at pace on our strategic priorities,’ Vodafone Group chief executive officer (CEO) Nick Read said.
‘We have also continued to invest in our fixed and mobile Gigabit network infrastructure and digital services, to provide faster speeds for our customers, as well as successfully managing the recent surges in demand,’ he said.
‘The services Vodafone provides are more important than ever and we are committed to playing a key role in society’s recovery to the ‘new normal’,’ he added.
Vodafone full-year results: key figures
- Vodafone recorded a loss of €455 million in its full-year (FY) results, but it is worth noting that it remains a significant improvement on the €7.64 billion loss it reported in the previous financial year.
- Operating profit at the telco did rebound, climbing to €4.09 billion, up from the €951 million loss it recorded last year.
- Revenue surged 3% year-on-year (YoY) to €44.9 billion, with Vodafone opting to keep its €0.09 per share dividend to shareholders.
- Free cash flow rose 4.7% to €5.7 billion, but net debt climbed 56% to €42.2 billion – 2x EBITDA – due to Vodafone’s acquisition of Liberty Global assets in Germany and Eastern Europe.
Barclays remains optimistic about Vodafone
Despite the challenges the telecoms provider faces, analysts at Barclays remain optimistic about Vodafone, with the lender reiterating its ‘overweight’ rating for the stock.
Barclays also left its target price for Vodafone unchanged at 170p per share, implying a potential upside of 37% for the stock.
How to trade stocks with IG
Create an IG trading account or log in to your existing account
Enter ‘Vodafone’ in the search bar and select it
Choose your position size
Click on ‘buy’ or ‘sell’ in the deal ticket
Confirm the trade
The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly skilled teams are available when you need support
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.