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Investing.com -- Vodafone Group Plc (LON:VOD) on Tuesday raised its full-year outlook after reporting higher revenue and earnings for the first half of fiscal 2026, supported by growth in the UK, Türkiye and Africa and the completion of its merger with Three UK.
The British telecommunications company said total revenue rose 7.3% to €19.6 billion for the six months ended September 30, 2025, compared with €18.3 billion a year earlier.
Service revenue grew 8.1% to €16.3 billion on a reported basis, or 5.7% on an organic basis. Adjusted EBITDAaL increased 5.9% to €5.7 billion, while operating profit declined 9.2% to €2.2 billion as higher depreciation and amortization followed the consolidation of Three UK.
Chief executive Margherita Della Valle said, “Based on our stronger performance, we are now expecting to deliver at the upper end of our guidance range for both profit and cash flow, and as our anticipated multi-year growth trajectory is now under way.”
Vodafone said it now expects adjusted EBITDAaL of €13.3 billion to €13.6 billion and adjusted free cash flow between €2.4 billion and €2.6 billion for the full year.
The company also introduced a new dividend policy and plans to increase the FY26 dividend per share by 2.5%.
The interim dividend was set at 2.25 eurocents per share, with an ex-dividend date of November 20 and payment due February 7, 2026.
Revenue growth reflected the integration of Three UK and continued expansion in key markets. Germany, which represents 33% of group service revenue, returned to growth in the second quarter with service revenue up 0.5%.
The UK recorded 1.2% organic service revenue growth in the quarter and total UK revenue rose 27.9% to €4.4 billion following the merger.
Africa delivered double-digit organic service revenue growth of 13.5% in the second quarter, supported by demand for data and mobile financial services.
Türkiye reported service revenue growth of 55.6% on an organic basis, with total revenue rising 15.1% to €1.6 billion.
Adjusted EBITDAaL in Africa rose 11% to €1.3 billion, with a margin of 34.1%. In Türkiye, adjusted EBITDAaL grew 58% on an organic basis to €485 million, reflecting higher prices and data use.
The UK’s adjusted EBITDAaL increased 25% to €884 million. Germany’s fell 4.3% to €2.2 billion, mainly due to lower TV revenue and prior-year investment.
Cash flow from operating activities decreased 9.8% to €5.1 billion, while adjusted free cash flow showed an outflow of €583 million, improving from the prior year.
Net debt rose to €25.9 billion from €22.4 billion on March 31 driven by merger-related outflows, share buybacks of €1 billion and dividend payments of €0.6 billion.
Vodafone completed €3 billion in share buybacks since May 2023 and began a €500 million tranche on the day of the results.
During the period, the company finalized its merger with Three UK, creating the largest mobile network in the country with 28.8 million customers.
It also completed the €30 million acquisition of Telekom Romania Mobile Communications S.A. and agreed to acquire German cloud and cybersecurity firm Skaylink GmbH for €175 million.
“Following the progress of our transformation, Vodafone has built broad-based momentum,” Della Valle said. “Whilst we have more to do, we delivered good strategic progress in the half year.”