Germany and Italy give half-year earnings boost to Vodafone
Mobile phone giant Vodafone has posted a rise in half-year earnings as it cheered a better-than-expected performance in Europe.
Vodafone saw a 4.3% lift in underlying earnings to 7.9 billion euros (£6.9 billion) in the six months to September 30, when stripping out the effects of currency volatility and merger and acquisition activity.
Chief executive Vittorio Colao said performance in Europe was led by Germany and Italy.
"As Europe's fastest-growing broadband operator, we are driving rapid uptake of our consumer fixed and TV services while our wholly converged enterprise business continues to outperform its peers. We are now translating faster revenue growth into margin expansion, supported by our focus on cost efficiency."
But foreign exchange volatility hit sales, which fell by 3.9% to 27.1 billion euros (£23.5 billion) over the period.
It follows the collapse of the pound, which has fallen nearly 15% against the euro since the Brexit vote.
Vodafone says it now expects underlying earnings to come in between 15.7-16.1 billion euros (£13.6-13.9 billion), narrowed from its previous range of 15.7-16.2 billion euros (£13.6-14 billion).
The company has said a 1% change in the sterling to euro exchange rate could knock underlying earnings by around 20 million (£17 million) and impact free cash flow by 10 million euros (£8.6 million).
A 1% change in the rupee to euro exchange rate is also expected to hit underlying earnings by around 20 million euros (£17 million).
Mr Colao said: "Overall, we expect to sustain our underlying performance in the second half of the year and remain on track to meet our full-year objectives despite macroeconomic uncertainties."