Vodafone PLC’s (LON:VOD) first-half performance was affected by a drop in roaming income as coronavirus restrictions stopped people travelling.
Revenue in the six months to 30 September dropped by 2.3% to €21.4bn, with lower handset sales also taking a toll alongside the COVID-19 issues.
Underlying profits (adjusted EBITDA) fell 1.9% to €7.0bn, though profits were helped by €300mln of cost-saving.
The interim dividend was maintained at 4.50c following the reduction in the final payment last time.
Net debt dropped to €44bn from €48.1bn a year ago, while the balance sheet is likely to be to further strengthened by the imminent IPO of infrastructure business Vantage Towers.
The mobile group confirmed it expected to complete the listing of Vantage Towers early in the New Year with more details expected tomorrow at a shareholder day.
Guidance for the full year was also confirmed at underlying profits of between €14.4-14.6bn with free cash flow of at least €5bn.
Nick Read, chief executive, said it was a resilient first-half performance
“COVID-19 and the reduction in roaming revenues, through the significant reduction in international travel, is currently obscuring our underlying commercial progress, with Q2 service revenue growing by 1.5% excluding roaming,” he said.
William Ryder, an equity analyst at Hargreaves Lansdown, noted there were some tough comparisons this half as the group lapped some price increases and international call rate regulation. "However, this half broadly went as management expected and full-year guidance has been maintained, as has the dividend."
" The next major step is an IPO for Vantage Towers, which is planned for early next year. We understand the rationale, and given recent market buoyancy Vodafone may yet get a good price. Vodafone is still in a tough industry though, so only time will tell whether the new structure will be enough to drive future growth.”
Shares rose 3.5% to 123.7p.
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