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 to difficult to anticipate 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
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
React to global volatility
Market volatility continues as coronavirus concerns amplify. Trade with IG and 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 only incur a fee when triggered
- Round-the-clock assistance – our highly skilled team are available when you need support
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.