Vodafone’s global sales slipped by nearly 5 per cent in the first quarter of this year, amid sluggish trading in Italy and Spain.
In Italy, the FTSE 100 telecoms giant saw sales fall by 6.7 per cent over the period, while in the ‘competitive’ Indian market, revenue slumped by 22 per cent. Sales in Spain fell by 1.7 per cent.
Despite its shaky start, the group said it remains on track to fulfill its full-year expectations, as it ploughs on with its third consecutive year of cost cutting.
Falling sales: Vodafone’s global sales slipped by 5 per cent in the first quarter of this year, amid sluggish trading in Italy and Spain
The group’s first quarter revenue came in at €10.9billion (£9.69billion) which Vodafone said represented organic growth of 1.1 per cent under the new IFRS 15 accounting standard
Vodafone’s chief executive, Vittorio Colao, said: ‘The Group’s organic service revenue growth slowed during the first quarter, in line with expectations.
‘The majority of our operations performed well, with ongoing momentum in Germany, further underlying recovery in the UK and continued good growth in AMAP, all of which helped to offset increased competition in Italy and Spain.
He added: ‘In India, where competition remains intense, we have now received conditional approval from the Department of Telecoms for the merger of Vodafone India and Idea Cellular, which we aim to close before the end of August, allowing us to unlock substantial synergies.
‘The group’s overall performance (including good progress in reducing absolute operating costs for the third year running) provides us with the confidence to reiterate our outlook for the year.’
The UK market was said to be continuing its ‘recovery’, the group said.
Taking a closer look at the UK market, the company said: ‘Excluding the impact of handset financing and regulation our underlying performance continued to improve.’
‘This was driven by growth in consumer mobile and fixed line, as well as the stabilisation of enterprise fixed, and reflects the substantial operational improvements and commercial actions taken over the past year.’
Revenue from servicing mobiles in the UK fell by 7.9 per cent over the period.
Moving on; In October, Vodafone’s current boss, Vittorio Colao, pictured, will be replaced by Nick Read
Vodafone reiterated its guidance for full year adjusted earnings growth of between one and five per cent.
The group’s share price is down 1.73 per cent or 3.07p to 174.59p follwing the update.
In Spain, the company is turning its back on football coverage and plans to expand its ‘content strategy’ on films and TV series coverage.
In October, Vodafone’s current boss, Vittorio Colao, will be replaced by Nick Read, who has been the company’s finance director since 2014.
Colao’s departure was announced a week after Vodafone clinched a long discussed deal when it agreed to pay $21.8billion to buy Liberty Global’s assets in Germany and eastern Europe. The deal should pave the way for the group to be able to offer a broader range of superfast cable TV, broadband and mobile services.