Vodafone maintains dividend and guides to flat earnings

Vodafone announced an unchanged interim dividend as the company forecast broadly flat annual earnings.

(Corrects prior-year Ebitda figure)

The FTSE 100 company kept its dividend at 4.5 cents a share as adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) fell 1.9% to €7bn. The mobile network operator posted a $1.6bn net profit compared with a €1.9bn loss a year earlier as revenue fell 2.3% to €21.4bn.

Vodafone said revenue fell because good underlying momentum was offset by a reduction in roaming and visitor revenue caused by Covid-19 and lower handset sales. Cost control helped limit the effect on earnings, it said.

The company said it expected annual Ebitda to be between €14.4bn and €14.6bn compared with €14.5bn a year earlier. It had previously said earnings would be flat or slightly down. Free cash flow will be at least €5bn, it said.

Vodafone shares rose 2.6% to 122.6p at 09:00 GMT.

Chief Executive Nick Read said: "We are reporting a resilient first-half performance and we continue to see good commercial momentum across the group. Covid-19 and the reduction in roaming revenues, through the significant reduction in international travel, is currently obscuring our underlying commercial progress."

This story corrects the 2020 adjusted Ebitda figure which was rebased to €14.5bn in May from €14.9bn.