Vodafone FY23 Adj. EBITDAaL Down, Sees Broadly Flat Result In FY24; Stock Dips

Shares of Vodafone Group Plc were losing around 4 percent in the morning trading in London as well as in pre-market activity on Nasdaq after the British telecom major reported Tuesday lower adjusted EBITDAaL, a key earnings metric, in its fiscal 2023. This was despite reporting significantly higher net profit, largely reflecting a gain on disposal of Vantage Towers. The company said its full-year performance slowdown was in line with expectations.

Further, the firm said it expects fiscal 2024 adjusted EBITDAaL to be ‘broadly flat’ with last year at around 13.3 billion euros. The outlook is based on last year’s rebased adjusted EBITDAaL of 13.3 billion euros on a comparable basis.

Adjusted free cash flow for the new year would be ‘around’ 3.3 billion euros, reflecting expected working capital movements, interest and dividend receipts.

Further, the company announced that total dividends per share are 9.0 eurocents, including a final dividend per share of 4.5 eurocents. The record date is June 9 and the dividend is payable on August 4.

In its fiscal 2023, profit surged to 12.34 billion euros from last year’s 2.77 billion euros. The prior year results were re-presented for the reclassification of Indus Towers.

Basic earnings per share were 42.77 eurocents, compared to last year’s 7.71 eurocents. Adjusted basic earnings per share were 11.45 eurocents, compared to 11.68 eurocents a year ago.

Operating profit surged 145.9 percent from last year to 14.30 billion euros.

Adjusted EBITDAaL declined to 14.67 billion euros from last year’s 15.21 billion euros due to higher energy costs, and commercial underperformance in Germany. Adjusted EBITDAaL declined 1.3 percent organically.

The adjusted EBITDAaL margin was 1.4 percentage points lower year-on-year at 32.1 percent.

Group revenue increased 0.3 percent to 45.71 billion euros from 45.58 billion euros last year. The results were driven by growth in Africa and higher equipment sales, offset by lower European service revenue and adverse exchange rate movements.

Group service revenue grew 2.2 percent organically to 37.97 billion euros.

Germany remained under pressure with 1.6 percent organic drop in service revenue and a drop of 6.1 percent in adjusted EBITDAaL. Meanwhile, Vodafone Business recorded 2.6 percent service revenue growth.

In London, Vodafone shares were trading at 86.42 pence, down 4.01 percent. In pre-market activity on Nasdaq, the shares were trading at $10.79, down 3.8 percent.

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