Vodafone (NASDAQ:VOD) is up 9.2% to its highest point in a month after a tough quarter came in largely to analysts' expectations, and new CEO Nick Read set up a path forward, with a dividend freeze to help address heavy debt and a focus on simplification and cost control.
For the six months, revenues fell 5.5%, mainly due to a loss it took on disposing of Vodafone India in the merger with Idea Cellular and other impairments.
On an organic basis, service revenue rose 0.8% for the six months; for the quarter it was up 0.5%, a slowdown from a first quarter growth of 1%.
Despite that slowdown, EBITDA rose 2.9% based on continuing expense cuts.
Free cash flow (pre-spectrum) was €0.9B vs. a prior-year €1.3B; post-spectrum, it was €0.6B vs. last year's €0.4B. Net debt stood at €32.1B as of Sept. 30, reflecting FCF of €0.9, proceeds from Verizon loan notes of €2.1B, offset by €2.7B in final fiscal 2018 dividend payments, spectrum purchases of €1B and a net outflow to India of €0.8B for the Idea transaction.
The company updated and narrowed full-year guidance for organic EBITDA growth of about 3% (vs. previous guidance for 1-5%) and boosted expectations for free cash flow to about €5.4B from €5.2B.
Previously: Vodafone Group reports 1H results (Nov. 13 2018)
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