Vodafone Shares Fall After Fiscal Year 2021 Adjusted Earnings Missed Expectations -- Update
--Vodafone reported adjusted earnings for fiscal 2021 below
consensus forecasts, sending shares lower
--The company has been hit by coronavirus impact on roaming
revenue and currency movements
--Vodafone expects to drive growth in revenue and cash flow in
the medium term
By Adria Calatayud
Shares in Vodafone Group PLC fell Tuesday after it reported
adjusted earnings for fiscal 2021 that missed analysts'
expectations and said it expects to drive returns in the medium
term through efficiency and growth in revenue and cash flow.
The U.K. telecommunications group, which has been hit by the
effects of the coronavirus pandemic on roaming and visitor revenue
as well as by foreign-exchange movements, has tried to streamline
its operations through the listing of its European infrastructure
arm, Vantage Towers AG, and the sale of noncore assets. The company
said it has delivered on the first of its strategy to reshape
itself to focus on Europe and Africa.
Vodafone made a pretax profit for the year to March 31 of 4.4
billion euros ($5.35 billion) compared with EUR795 million for
fiscal 2020. The company swung to a net profit of EUR112 million
from a net loss of EUR920 million a year earlier.
Adjusted earnings before interest, taxes, depreciation and
amortization--the company's preferred metric, which strips out
exceptional and other one-off items--for the year declined 1.2% to
Revenue for the year fell 2.6% to EUR43.81 billion.
Analysts expected Vodafone to report an adjusted Ebitda of
EUR14.54 billion on revenue of EUR43.64 billion, according to a
company-collated consensus based on estimates by 16 analysts.
Shares at 0721 GMT were down 6.2% at 132.92 pence ($1.88).
The company said service revenue returned to growth in the
second half of the year and that it ended the year with
accelerating service revenue growth across the business, with a
particularly positive performance in Germany, its largest
Vodafone said it expects adjusted Ebitda to be between EUR15.0
billion and EUR15.4 billion this year, with adjusted free cash flow
anticipated to be at least EUR5.2 billion.
The company's adjusted Ebitda guidance for fiscal 2022 is in
line with consensus expectations of EUR15.22 billion, but analysts
expected free cash flow before spectrum costs to be EUR5.44 billion
in the current year.
"The increased demand for our services supports our ambition to
grow revenues and cash flow over the medium-term," Vodafone Chief
Executive Nick Read said.
"We remain fully focused on driving shareholder returns through
deleveraging, improving our return on capital, and a firm
commitment to our dividend," Mr. Read said.
The board maintained its full-year dividend at 9 European cents
a share, flat on year.
Write to Adria Calatayud at firstname.lastname@example.org
(END) Dow Jones Newswires
May 18, 2021 03:55 ET (07:55 GMT)
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