0755 Tuesday 13 November 2018

The much anticipated first half year results from Vodafone were released this morning with most results generally in line with estimates and some of the investor nerves will have been settled, for now at least.

Here are some of the highlights:

  •          Revenue for the group reached €21.8bn

  •         Loss for the financial period €7.8bn

  •         Organic service revenue up 0.8%

  •          Fixed broadband +384,000

  •          Vodafone Business up 1%

  •          Organic adjusted EBITDA up 2.9%

  •          Full year guidance: EBITDA narrowed to 3%

  • Free Cash Flow raised to €5.4bn

  •          Interim dividend in line with guidance at 4.84 eurocents.

The results come in mainly as what was expected from the market and the press release supporting the report elaborated further into the factors that made them up. As expected, M&A, growing competition and group expansion weighed heavily on the results, but growth was still underlined providing optimism.

The losses incurred by the group were mainly due to the completion of the merger with Idea Cellular in India as well as other deals throughout Europe and Australia. However, these were as expected due to the increased competition within the markets. Figures within the report were buoyed as service revenue grew despite the competition faced by the group. Broadband client base grew, as did Vodafone Business figures.

Most importantly for some investors, the full year dividend proposed sits at 15.07 eurocents in line with FY18 guidance meaning that the interim dividend will likely be 4.84 eurocents and is likely to be paid on or around 1/2/19. It is worth noting that both the full year and interim dividend are both above some analyst expectations and will settle many nerves as concern had started to build as to whether it would be cut.


Looking forwards, Vodafone looks to build on the foundations laid for 5G rollout. It was highlighted that the group expects to launch 5G services throughout 2019-20 and this will build on the cross selling of products to customers as the company identified that the existing client base is an area of focus.

Another avenue for future revenue is the sale of assets either acquired through or no longer needed through M&A and partnerships formed during the past year. The total assets held for sale sits at €242m and will include many cellular towers owned by the firm.

2018 has in general been a worrying one for investors but this report will have calmed some. The year to date performance for the company though cannot be ignored, with VOD down 33% so far. Investor’s currently holding positions in the firm will no doubt be satisfied that the dividend is held up, but will now be faced with a decision regarding future performance. The year so far has been one of consolidation and positioning moving forwards and it would appear that the firm has been positioned well to capitalize on opportunities and growth in the coming years. New technologies including 5G and Gigafast broadband will be in focus for the next 18 months and Vodafone look to be in the driving seat in many markets.

As always, to get further analysis of Vodafone, please call one of our dedicated brokers on 0121 454 0770.

You can also read the full financial results press release here.


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