Vodafone shares suffer 8% loss as group’s FY21 revenue dips over 2%

Summary

• Vodafone shares collapsed over 8 per cent in the late deals on Tuesday
• Telecom major reported a revenue decline of 2.6 per cent EUR 43.80 billion
• Disposal of Vodafone New Zealand also contributed towards contraction
• the stock plunged 8.7 per cent to a two-week low of GBX 129.36 

Shares of Vodafone Group Plc (LON: VOD), the Berkshire-headquartered telecommunications major, collapsed more than 8 per cent in the late afternoon deals on Tuesday, 18 May, after the company reported a less-than-expected revenue for the financial year 2020-21.

Vodafone’s revenue for FY21 dropped by 2.6 per cent to EUR 43.80 billion as compared to a total revenue of EUR 44.97 billion in the financial year 2019-20. The monetary benefit recognised from the asset acquisition of Liberty Global was largely offset by the underlying decrease in the revenue from handset sales, roaming, visitors and foreign exchange rate variation due to the volatility perpetrated by the Covid-19 pandemic.

The disposal of Vodafone New Zealand also contributed towards the contraction in the full year revenue, the company said in a regulatory filing.

According to the data available with the London Stock Exchange, the stock of Vodafone shed as much as 8.7 per cent to a two-week low of GBX 129.36 from the previous closing price of GBX 141.70 apiece. Shares of Vodafone fell sharply in the wee hours of trading, hovered around the same level for most part of the day, but extended the losses in the late afternoon session.

Vodafone shares (18 May)

(Source: Refinitiv, Thomson Reuters)

The present calendar year has been quite eventful for Vodafone, as far as the share market performance is concerned, the stock has amassed a gain of little more than 14 per cent, barring the today’s plunge. Looking at the broader picture, the stock of Vodafone has weakened further after witnessing a major wipeout during the Covid-steered stock market crash.

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Furthermore, the stock has lost much of its strength in the last three year as it has struggled to thrive in other international geographies. The age-old telecom conglomerate has failed to sustain the momentum over the time. The stock has lost over 40 per cent of its stock market value in the last three-and-a-half years.

The adjusted EBITDA for Vodafone fell by 1.2 per cent to EUR 14.4 billion in the reporting year. On the other hand, the operating profit of the group rose by 24.3 per cent to EUR 5.1 billion as compared to the profit of EUR 4.1 billion, recognised in the same period in the previous fiscal.

Vodafone has announced a total dividend of 9 euro cents for the FY21, including a financial dividend of 4.5 euro cents per share, which will be payable on 6 August 2021. For the said  dividend, the group has fixed 24 June as the ex-dividend date, while 25 June 2021 will be the record date.