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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 €1 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 €1.73 billion, up 35% from €1.28 billion the previous year.
Revenue climbed by 2.0% to €22.93 billion from €22.49 billion, driven by higher service revenue and higher equipment sales. Within this, service revenue rose 1.1% to €19.21 billion from €19.01 a year ago.
Operating profit increased by 12% to €2.94 billion from €1.62 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 €7.24 billion, down from €7.57 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 €1 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 €15.0 billion and €15.2 billion. Previously, it had guided between €15.0 billion and €15.5 billion. For financial 2022, adjusted Ebitda amounted to €15.2 billion.
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