Vodafone meets earnings expectations, pulls guidance due to Covid-19

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The Vodafone logo seen displayed on a smartphone with a computer model of the coronavirus on the background.

Budrul Chukrut | SOPA Images | LightRocket via Getty Images

Vodafone, the world’s second largest mobile operator, met expectations with a 2.6% rise in full-year core earnings to 14.9 billion euros ($16.10 billion), but did not give a current year outlook due to the uncertainty caused by the coronavirus.

“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,” it said on Tuesday.

“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.”

The company said given the uncertainties and impacts of the global pandemic it was not able to provide adjusted core earnings guidance for the current year.

But it said that based on assessment of the global economy, it could be flat to slightly down, compared to a rebased 14.5 billion euros for 2020.

It did provide guidance for free cash flow before spectrum costs, which underpins its dividend, saying it would be at least 5 billion euros.

Vodafone Chief Executive Nick Read cut the company’s dividend a year ago, relieving immediate pressure on the group’s balance sheet. It maintained its full-year payout at 9.00 euro cents a share.

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