Vodafone's sales drop but group revenue rises
Vodafone has announced its quarterly results showing drops in sales but a rise in group profits.
Vodafone has reported a slight decline in quarterly organic sales in line with muted expectations.
Although organic service revenue fell 2.1 per cent in the quarter, which ended in June, group revenue rose 9.3 per cent to 10.743 billion, thanks to positive currency effects and a higher stake in South Africa's Vodacom.
"In the first quarter, the service revenue trend in Europe was consistent with the previous quarter and we continued to see good growth in India and South Africa," Vodafone's chief executive, Vittorio Colao, said in a statement.
"Our total communications strategy is delivering well, with organic data revenue up 19 per cent and organic fixed line revenue seven per cent ahead of the comparative period."
Vodafone, the first of Europe's major telecoms carriers to report its results, said it would update the market in November on its progress in cutting 1 billion from its overheads after it said in May it would speed up its cost-cutting plan.
"We have a relief rally. They delivered in line. They reiterated their guidance and said: 'Wait until November and we'll deliver a good cost-control story,'" said analyst Mike Kovacocy of Daiwa Securities. "It's looking like its going to be one tough slog for the rest of the year."
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