London: British mobile phone giant Vodafone on Tuesday provided a positive outlook following an unexpected revenue rebound in its primary market, Germany, and a significant UK merger. Despite a 22 percent drop in net profit to 829 million euros ($959 million) in the first half due to higher costs, Vodafone's shares rose four percent in London morning deals.
According to Bangladesh Sangbad Sangstha, investors were encouraged by slight revenue growth in Germany and Vodafone's first dividend increase in seven years. Group chief executive Margherita Della Valle highlighted the acceleration in service revenue in the second quarter, with notable performances in the UK, Turkey, and Africa, alongside a return to top-line growth in Germany. This performance has led Vodafone to anticipate hitting the upper end of its guidance range for both profit and cash flow.
The CEO's turnaround plan, launched in 2023, has involved significant changes, including thousands of job cuts to reduce costs, as well as the sale of its Spanish and Italian branches and a merger with UK rival Three, finalized at the end of May. Richard Hunter, head of markets at Interactive Investor, noted that Vodafone had previously been overwhelmed by numerous challenges and a burdensome debt load, necessitating a substantial transformation. The company is now emerging as a more focused operation, albeit smaller and less geographically diversified.
In its recent announcement, Vodafone reported a 7.3 percent increase in group revenue to 19.6 billion euros for the six months ending in September. Notably, service revenue in Germany rose by 0.5 percent in the second quarter, marking the first increase since legislative changes in the country restricted housing associations from bundling TV contracts with rent. In addition to mobile phone services, Vodafone also offers broadband and television services to its customers.