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(Alliance News) - Vodafone Group PLC on Tuesday reported a "resilient" interim performance despite a "challenging" macroeconomic environment but nonetheless lowered its full-year guidance. It also said it is planning EUR1 billion or more in cost cuts.
Vodafone is a Berkshire, England-based telecommunications company which operates mobile and fixed networks in 22 countries, and partners with mobile networks in 47 more.
Shares were down 5.9% at 98.02 pence each on Tuesday morning in London, underperforming the wider FTSE 100 index, which was up 0.1%.
In the six months that ended on September 30, Vodafone posted pretax profit of EUR1.73 billion, up 35% from EUR1.28 billion the previous year.
Revenue climbed by 2.0% to EUR22.93 billion from EUR22.49 billion, driven by higher service revenue and higher equipment sales. Within this, service revenue rose 1.1% to EUR19.21 billion from EUR19.01 a year ago.
Operating profit increased by 12% to EUR2.94 billion from EUR1.62 billion, reflecting a "higher share of income from associates and joint ventures and lower depreciation and amortisation", Vodafone said.
However, adjusted earnings before interest, tax, depreciation, and amortization and special losses amounted to EUR7.24 billion, down from EUR7.57 billion the year before. Vodafone said the decline was due to revenue growth being offset by a "prior year one-off legal settlement in Italy" and "commercial underperformance in Germany".
Chief Executive Nick Read said the firm was taking a number of steps to mitigate the "economic backdrop of higher energy costs and rising inflation". This included pricing action in Europe, he said, as well as a new cost saving target of EUR1 billion or more.
Vodafone declared an interim dividend of 4.50 euro cents, unchanged from a year prior.
Looking ahead, Vodafone lowered its full-year outlook for adjusted earnings before interest, tax, depreciation, and amortization and special losses to between EUR15.0 billion and EUR15.2 billion. Previously, it had guided between EUR15.0 billion and EUR15.5 billion. For financial 2022, adjusted Ebitda amounted to EUR15.2 billion.
By Xindi Wei; xindiwei@alliancenews.com
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