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(Alliance News) - Vodafone Group PLC on Tuesday reported a swing to profit for financial 2020 as it maintained its all-important annual dividend.
The FTSE 100 stock was trading 5.6% higher at 119.30 pence each on Tuesday morning in London.
For its financial year to the end of March, the telecommunications provider swung to a pretax profit of EUR795 million from a loss of EUR2.61 billion in financial 2019. Revenue rose 3% to EUR44.97 billion from EUR43.67 billion last year.
Adjusted earnings before interest tax depreciation and amortisation grew by 2.6% to EUR14.9 billion, reflecting revenue progression and cost savings success. Free cash flow grew by 12% to EUR4.9 billion.
Vodafone said it had 64.4 million mobile contract customers in Europe in financial 2020, up 1.9% from 63.2 million the year before. European broadband customer numbers rose 33% to 25.0 million from 18.8 million.
A final dividend of 4.5 euro cents was declared, up from 4.16 cents the year prior, thereby maintaining the total annual dividend at 9.0 cents.
Vodafone is a key dividend payer for UK investors. At its current share price, the stock offers a dividend yield of 6.6%.
Looking ahead, Vodafone guided for financial 2021 adjusted earnings before interest, taxes, depreciation, and amortization to be flat to slightly lower from EUR14.5 billion.
"Whilst our business model is more resilient than many others, we are not immune to the challenges. We are experiencing a direct impact on our roaming revenues from lower international travel and we also expect economic pressures to impact our customer revenues over time. However, we are also seeing significant increases in data volumes and further improvements in loyalty, as our customers place greater value on the quality, speed and reliability of our networks, Vodafone said
"Given the uncertainties and impacts we are not able to provide adjusted Ebitda guidance for financial 2021. However, based on the current prevailing assessments of the global macroeconomic outlook, adjusted Ebitda for FY21 may be flat to slightly down, compared to a rebased FY20 baseline of EUR14.5 billion," the company added.
By Ife Taiwo; ifetaiwo@alliancenews.com
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