Vodafone reports strong profit growth in first half

Vodafone Group PLC announced on Tuesday that its profit more than doubled in the first half of its current financial year, driven by increased income and reduced costs.

Vodafone reports strong profit growth in first half

For the six months ending September 30, the company reported a pretax profit of EUR2.11 billion, up from a restated EUR830 million in the same period last year. The restated results reflect the discontinued operations of Vodafone Spain and Vodafone Italy, which were sold off during the period.

Revenue and cost performance

The telecommunications provider saw a 1.7% increase in revenue, reaching EUR18.28 billion, compared to EUR17.98 billion in the prior year. However, the cost of sales rose slightly by 0.8% to EUR12.12 billion, while selling and distribution expenses increased by 5.4% to EUR1.36 billion, and administrative expenses grew by 5.9% to EUR2.70 billion. Despite these increases, financing costs fell by 40%, dropping to EUR843 million from EUR1.40 billion, and "other income" swung from a negative EUR67 million to a positive EUR533 million.

Dividend and strategic outlook

Vodafone declared an interim dividend of 2.25 euro cents per share, down 50% from the previous year’s 4.50 euro cents. This reduction is part of a strategy to introduce a more sustainable dividend level that ensures sufficient cash flow flexibility to support future growth investments. The company targets a full-year dividend of 4.50 euro cents. CEO Margherita Della Valle highlighted the progress Vodafone has made in reshaping the group, with transactions in the UK and Italy nearing completion. She emphasized that despite challenges in Germany, the company remains on track to meet its full-year guidance, expecting growth in service revenue and adjusted EBITDA. Vodafone also continues to pursue a merger with Hutchinson 3G UK (Three UK), working with the UK’s Competition & Markets Authority to gain approval, with the merger expected to conclude in early 2025.