More cost cutting on the agenda
Britain’s Vodafone has reported a fall in third-quarter revenues due to “very difficult market conditions” across Europe, the mobile giant’s biggest market by revenue, but reaffirmed its annual guidance for adjusted operating profit and free cash flow. Revenue fell 2 per cent to £11.39 billion, slightly ahead of market expectations of £11.29 billion.
Group service revenue, which makes up the bulk of Vodafone’s income, fell 2.6 per cent on a comparable basis for the quarter ending on 31st December.
Analysts had expected a 2.4 per cent drop. That compares with a 1.4 per cent fall in the second quarter of fiscal 2013.
The FTSE 100 company was hit by fewer customers using its services in Spain and Italy and other southern European markets, regulation in Germany and a slowing performance in Britain, where it is struggling with fierce competition and regulatory changes.
Vodafone is cutting jobs in Europe, including as many as 1,000 in Spain, to lower costs as it grapples with shrinking sales.
Of Vodafone’s 403 million customers, those in Britain and Germany cut back on usage to stick within their price plans while fewer customers signed up to its network.
No profit figures for the third quarter were provided by the company which is turning its attention to cost savings, at the same time as buying back major tranches of its own shares.