Mobile network Vodafone surprised analysts with better-than-expected first-half earnings, spurred on by increased demand in European markets.
The group reported a 4.3 percent rise in core earnings in the first half of the year, with earnings before interest, tax, depreciation and amortization standing at 7.9 billion euros, above the 7.8 billion euro forecast.
Chief Executive Vittorio Colao attributed the results to a “modest” improvement in both Germany and Italy, and a well-executed strategy in emerging markets such as India.
“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,” Colao said.
“Competition in India has increased in the year, reducing revenue growth and profitability. We have responded to this changing competitive environment by strengthening our data and voice commercial offers and by focusing our participation in the recent spectrum auction on acquiring frequencies in the more successful and profitable areas of the country.
“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. This performance allows for improved returns to our shareholders, as reflected by the growth in the interim dividend.”
Organic service revenue rose 2.4 percent in the second-quarter, unexpectedly ahead of the 2.2 percent seen in the first quarter.
Data traffic growth was “robust” at 61 percent across the group, which saw a further 675,000 broadband additions during the half year. Vodafone is now the fastest growing broadband provider in Europe, operating across 82.1 million homes.
Vodafone (LON:VOD) is currently trading up 1.29 percent at 207.15 (1011GMT).