Vodafone share price falls as dividend is slashed

Vodafone’s share price has fallen after it revealed a €7.6 billion full-year loss and cuts to the dividend as debts continue to mount.

Vodafone has cut its dividend, news, that to some, will have come as no surprise. With the 16-month decline in its share price the dividend pay-out had, most recently, represented a near 10% yield.

Vodafone dividend cut accompanied by €7.6 billion loss

This body blow to Vodafone investors was accompanied by news that Vodafone had also swung to a full-year loss, brought about, in part, by a financial transaction in India and a cut in the value of investments in Spain and Romania. This loss amounted to €7.6 billion, compared to a profit in the same period last year of €2.8 billion.

So why has Vodafone decided that it had to reduce payments to shareholders? First, with that elevated rate of dividend, it had long been considered as unlikely that the board would keep the payments in place. Secondly, the company feels that the ‘rebased dividend [would help] to rebuild financial headroom’ meaning that the money would be re-directed to help pay down debt and carry the company forward into a 5G world.

5G costs begin to bite for Vodafone

On the 5G side, in a separate announcement, Vodafone confirmed that the company will be delivering a 5G service across seven cities in the UK on 3 July, with another 12 cities to follow by the end of the year. Indicating that it is launching Europe’s largest 5G network enabling ten times faster downloads and undertake a network for smart cities, all at a tenth of the cost of existing capabilities. Nick Read, group chief executive of Vodafone, said the company was at a 'key point of transformation'.

It's been a mixed reaction on the day for Vodafone stock, however, by mid-afternoon shares were trading down 2.7% with a share price not having been seen since May 2010.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research 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 and quarterly summary.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

See opportunity on a stock?

Don’t miss your chance. Try a risk-free trade in your demo account, and find out whether your hunch could have paid off.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance. Upgrade to a live account to take advantage.

  • Trade a wide range of popular global stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform, when it matters

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Bid
Offer
-
-
China 300
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

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 spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.