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Vodafone Group FY Pretax Profit Rises; Group Organic Service Revenue Up 1.6%

Vodafone Group Plc (VOD.L,VOD) reported fiscal year pretax profit of 3.88 billion euros compared to 2.79 billion euros, prior year. Profit for the year was 2.8 billion euros, including a 2.2 billion euros net of tax reduction in the carrying value of the Group's operations in India and a 1.9 billion euros increase in deferred tax assets in Luxembourg. Operating profit rose to 4.3 billion euros compared to 3.7 billion euros, in the prior year, reflecting operational leverage and the benefit of cost efficiency initiatives.

Group adjusted EBITDA was up 4.2% at 14.7 billion euros, despite the deconsolidation of Vodafone Netherlands and adverse foreign exchange movements. Organic adjusted EBITDA grew 11.8%, a significantly faster pace than service revenue. Excluding the negative impact of net roaming declines in Europe, the benefits of settlements in the UK and Germany and the introduction of handset financing in the UK, organic adjusted EBITDA grew by 7.9%. Adjusted earnings per share from continued operations increased 44.2% to 11.59 eurocents.

Group revenue for the year declined 2.2% to 46.6 billion euros, primarily due to the deconsolidation of Vodafone Netherlands following the creation of the joint-venture 'VodafoneZiggo', and foreign exchange movements. Group organic service revenue grew 1.6%.

For fiscal 2018, the Group expects organic EBITDA to grow by 11.8% to 15.0 billion euros, above the Group's rnnnnevised guidance range for 'around 10%' organic growth set in November 2017.

For fiscal 2019, the Group expects to grow adjusted organic EBITDA by 1 - 5%, excluding the impact of UK handset financing in both years, and the significant benefit in the prior year from regulatory settlements in the UK and a legal settlement in Germany. Based on guidance FX rates, and under IAS18 accounting standards, this implies an adjusted EBITDA range of 14.15-14.65 billion euros for the year.

The Board recommended a final dividend per share of 10.23 eurocents, up 2.0% year-on-year, consistent with the Board's intention to grow the dividend per share annually.

The Vodafone Group Board announced the succession plan for the role of Group Chief Executive. Effective 1 October 2018, Vittorio Colao will be succeeded by Group Chief Financial Officer Nick Read. At the date of the Group's Annual General Meeting on 27 July 2018, Deputy CFO Margherita Della Valle will succeed Nick Read as Group Chief Financial Officer and will join the Board, and Nick Read will become Group Chief Executive-Designate.

by RTTNews Staff Writer

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