Source: Sharecast
The company on Tuesday said German service sales were down 6.4% in the period, compared with a 6.2% decline in the previous three months, primarily due to the impact of a new state media law on pay TV. Despite the fall Vodafone reiterated full year guidance of €11bn in core earnings adjusted free cash flow of at least €2.4bn.
Service revenue for the group grew 5.2% in the three months to December 31 to €9.8bn, driven by the UK, Turkey and Africa. Analysts had been expecting a figure of 4.2%.
Adjusted earnings before interest, tax, depreciation and amortisation rose 2.2% to €2.8bn.
The company added that its now cleared merger with Three in the UK was expected to formally complete in the next few months.
"We are continuing to invest in the turnaround of our German business and we are starting to see improving customer trends, although conditions have become more challenging in the mobile market," chief executive Margherita Della Valle.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "The signal’s getting stronger at Vodafone, with service revenue growth exceeding expectations, thanks to dialled-up performance in the UK, Africa, and Turkey. But Germany remains a dropped call, weighing on overall performance."
"The €8bn Italy sale is in the bag, and the UK merger with Three has the green light, setting Vodafone up for a network-wide reboot with scale and cost synergies."
Reporting by Frank Prenesti for Sharecast.com