Vodafone Group PLC (LON:VOD) reported revenue broadly in line with its expectations for the three months to December Friday, and repeated that it will generate enough cash to pay a heavy dividend bill for the full year.
The U.K. Telecoms Giant said the quarter had been in line with its expectations, and that it still expects its basic underlying earnings to rise by about 3% in the fiscal year ending in March.
It also expects to generate 5.4 billion euros ($6 billion) in free cash flow, which will more than cover this year’s dividend.
Vodafone Shares were yielding just under 8.9% at Thursday’s close, reflecting fears that it isn’t able to sustain its current payout ratio.
“Overall, this performance underpins our confidence in our full year guidance,” Chief Executive Nick Read said.
Group Revenue Fell As Expected To 11.0 Billion Euros on a mixture of disposals, foreign exchange effects and a change in accounting standards.
Earnings per share weren’t disclosed.
Vodafone’s shares in London had fallen 3.5% on Thursday after its South African unit Vodacom Group Ltd (JO:VODJ) reported a surprising drop in revenue in the quarter due to an unsuccessful promotion campaign. However, Vodafone said strong growth across the rest of its African business in the quarter offset that.
Revenue from its non-European operations was up 4.9% in the period.
It also reported a 2 percentage point drop in its churn rate among mobile customers, an improvement that Vodafone said wasn’t yet reflected in its revenue numbers.
The Company Also Repeated Friday That It Intends To Raise Further Cash By Selling At Least Some Of Its Towers Business In The Medium Term.