Vodafone lifts earnings, cash flow guidance as H1 profits rise

Vodafone on Tuesday lifted earnings and cash-flow guidance after reporting a rise in first-half adjusted core profits driven by a rebound in handset sales and a stronger performance in Europe and Africa.

The mobile telecoms group said adjusted earnings before interest, tax, depreciation and amortisation rose 6.5% to £7.5bn. It raised its earnings guidance to €15.2bn from €15bn with the upper end of the range remaining at €15.4bn.

Its free cash flow target was increased to at least €5.3bn from at least €5.2bn. On a pre-tax basis pre-tax profit for the six months to September 30 fell to €1.28bn from €1.93bn a year ago.

Total revenue grew 5% to €22.5bn, driven by service revenue growth in Europe and Africa and a recovery in handset sales following COVID-19 disruption in the prior year. Vodafone held its interim dividend steady at 4.5c per share.

“The results show we have demonstrated good sustainable growth and solid commercial momentum,” said chief executive Nick Read.

“Our strengthened performance in Africa and Europe puts us on track to be at the top end of our guidance for this year, as well as firmly within our medium-term financial ambitions.”

'We know there is more to do and our focus remains on driving growth. We are structured for value creation, with operational priorities and portfolio actions which are designed to improve returns at pace.”

Vodafone in May set out plans to increase investment in boosting in its networks, expanding Vantage Towers, its new demerged infrastructure venture and digital services, particularly for its business customers, which are set to benefit from €750bn of European Union recovery funds.