Vodafone Says Europe is Stable as Sales Beat Expectations --2nd Update
22 Luglio 2016 - 11:48AM
Dow Jones News
By Simon Zekaria
LONDON-- Vodafone Group PLC's investment bet in Europe is paying
off.
March this year marked the end of the British telecommunication
giant's two-year spending plan, worth tens of billions of dollars,
to upgrade its operations around the world, including in Europe
where Vodafone makes over half its earnings and two-thirds of its
sales.
It has reaped the benefits of this with improved results and on
Friday the Newbury, England-based firm reported
better-than-expected revenue and its eighth consecutive quarter of
sales growth.
The world's second-largest mobile carrier by subscribers after
China Mobile Ltd. said revenue excluding handset sales, currency
movements and mergers or acquisitions--a key gauge of performance
in the telecom sector--rose 2.2% in the three months ended June
30.
This figure, ahead of a consensus forecast of 1.9%, compares
with a 2.5% gain in the previous quarter of the last fiscal year,
which was boosted by an extra day's trading and accounting
changes.
In Europe, growth on the same basis was 0.3%, compared with a
0.5% gain in the previous three months. In the same period a year
earlier, Europe revenue dipped 1.5%.
"We continued to make good progress," said Chief Executive
Vittorio Colao, adding that the result showed Europe was
"stable."
In recent years, Vodafone has plowed billions of dollars into
its European operations to turn around yearslong anemic trading
across the region. To jump-start its performance, it has bought up
fixed-telecom assets to expand its reach, rolled out fiber-optic
cable to spearhead a push into bundled media services and upgraded
wireless network speed to tap consumers' rising consumption of
internet data.
Germany, Spain and Italy revenue rose 1.6%, 1.3% and 1.2%,
respectively. U.K. revenue fell 3.2%.
Outside of Europe, revenue grew at a faster clip of 7.7% as
Vodafone tapped large populations in fast-growing telecom economies
like India, Turkey and Egypt, as well as across Africa.
Vodafone's overall first-quarter revenue dipped 4.5%
year-over-year to EUR13.4 billion ($14.8 billion).
The company didn't disclose profit figures and kept its outlook
unchanged.
Vodafone shares rose 3.5% in early deals as investors warmed to
the numbers. 'Eurozone recovery plays are few and far between in
the U.K. market, and Vodafone is easily the largest and most liquid
that we can identify," said Hargreaves Lansdown analyst Nicholas
Hyett.
Mr. Colao on Friday said it would take several months for the
firm to effectively assess the impact of Brexit.
"It is very early days," said Mr. Colao, adding that the process
should be handled "pragmatically."
The company campaigned for the U.K. to remain in the European
Union and last month said it would consider moving its headquarters
out of the country after Britain's vote to leave the bloc, although
it said it is too early to make that call.
Vodafone, whose key European operations are in Spain, Italy and
Germany, as well as the U.K, has stressed the benefits from the
EU's single market trade rules and freedom of movement.
On Friday, the company switched to reporting in euros from
sterling for the first time, signaling the company's increased
European focus.
Write to Simon Zekaria at simon.zekaria@wsj.com
(END) Dow Jones Newswires
July 22, 2016 05:33 ET (09:33 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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