Vodafone announced on Tuesday a growth in organic earnings by 2.2% for 2024, satisfying market predictions, following a return to leading growth in the closing quarter supported by advancements in the UK, Germany, and Ireland. Margherita Della Valle, the CEO, stated that the company was experiencing growth in all European markets after deciding to divest from their underperforming Spain and Italy operations. Vodafone is also expanding in Africa.
In Ireland, service revenue experienced a surge due to an increased average customer base and annual contractual rate increments, which subjected customers to an additional 3% increase atop the consumer price index. The company also gained 30,000 new mobile contract clients. Despite a 22% share decline in the past year, Vodafone shares rose 3.5% in early trading to 72.5 pence.
The UK enterprise reported core earnings of €11.02 billion, equalling predictions, and surpassed market projections for adjusted free cash flow of €2.6 billion for the year ending in March. After announcing the Italy deal in March, Vodafone revealed plans to reduce its dividend to 4.5 cents per share due to the decreased cash flow from its downsized operations. It also intends to repurchase shares worth €4 billion.
The company anticipates its core earnings for this year to remain consistent at around €11 billion, while forecasting a minimum free cash flow of €2.4 billion, somewhat exceeding the current market predictions. According to the company itself, Germany recovered from a slump with a 0.2% full-year increase in service revenue and a 0.6% uptick for the final quarter. However, inflationary pressures like higher energy costs led to a 5.8% decline in adjusted core earnings.
CEO Della Valle emphasised the need for further improvements in the coming year. She outlined plans to increase customer experience investments, boost Germany’s underlying performance, and expedite Business’s momentum, while continuing to streamline operations. – Reuters
(c) Copyright Thomson Reuters 2024