Vodafone Cuts Dividend, Meets Fiscal Year 2019 Adjusted Ebitda Expectations -- Earnings Review

Date : 05/14/2019 @ 1:33PM
Source : Dow Jones News
Stock : Vodafone Group Plc (VOD)
Quote : 160.02  0.22 (0.14%) @ 4:35PM
Vodafone share price Chart

Vodafone Cuts Dividend, Meets Fiscal Year 2019 Adjusted Ebitda Expectations -- Earnings Review

Vodafone (LSE:VOD)
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By Adria Calatayud


Vodafone Group PLC (VOD.LN) reported results for fiscal 2019 on Tuesday. Here's what you need to know:


REVENUE: The U.K. telecommunications company generated revenue of 43.67 billion euros ($49.06 billion) for the year ended March 31, down 6.2% from EUR46.57 billion a year earlier. Vodafone missed analysts' expectations of EUR45.01 billion, according to a consensus based on estimates by 15 analysts provided by FactSet.


ADJUSTED EBITDA: Vodafone's adjusted earnings before interest, taxes, depreciation and amortization--its preferred profit measure--came to EUR14.14 billion, broadly in line with a FactSet-provided consensus. Organic adjusted Ebitda excluding handset financing costs and other exceptional items rose 3.1%, in line with the company's guidance of around 3% growth in underlying organic adjusted Ebitda.




-DIVIDEND: Vodafone slashed its total dividend for fiscal 2019 by 40% to 9.0 European cents a share, reversing a previous commitment to maintain it unchanged at 15.07 European cents. The move was widely expected, following press reports over the weekend.

"We think the dividend cut is the right thing to do--there was little credit being given for the prior dividend, it removes an overhang from the company and accelerates de-leveraging," analysts at UBS said in a note.


-GUIDANCE: The company has guided for adjusted Ebitda of between EUR13.8 billion and EUR14.2 billion in fiscal 2020, implying single-digit organic growth. Free cash-flow before spectrum costs is expected to come in at least at EUR5.4 billion, Vodafone said.

Analysts at Jefferies said Vodafone should experience similar trends in the first quarter of fiscal 2020 and an improvement toward the second half of the year.


-5G: Vodafone said it will switch on its 5G network in the U.K. on July 3, when the service will become available in seven cities--Birmingham, Bristol, Cardiff, Glasgow, Manchester, Liverpool and London. A further 12 U.K. cities will follow later in the year. The company said it will offer 5G roaming in the U.K., Germany, Italy and Spain over the summer.


Write to Adria Calatayud at adria.calatayudvaello@dowjones.com


(END) Dow Jones Newswires

May 14, 2019 08:18 ET (12:18 GMT)

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