Published : 1 month ago, on 12/11/2024

LONDON (Reuters) -Mobile operator Vodafone on Tuesday reported a sharp downturn in Germany, it biggest market, in the second quarter after it was hit by a change in the law on TV sales, sending its shares 4% lower.

The British company said that despite the customer losses in Germany, growth in Turkey, Africa and other European markets helped revenue grow in the first half and keep it on track to meet its full-year forecasts.

Shares in Vodafone fell to a three-month low of 69 pence in early deals.

It reported first-half service revenue of 15.1 billion euros ($16.06 billion), a 4.8% increase on an organic basis and slightly ahead of expectations, and a 3.8% rise in adjusted core earnings to 5.4 billion euros, in line with market consensus.

Vodafone’s service revenue in Germany fell 6.2% in the second quarter compared with a 1.5% fall in the first. The company has been hit by a change in the law in the country to end the selling of TV in bulk to apartment blocks.

Chief Executive Margherita Della Valle said the company was investing in Germany to strengthen its market position and expand its business-to-business capabilities.

“We delivered good performances across our markets, with the exception of Germany, where we have been impacted as expected by the TV law change,” she said.

“I am confident that the actions we are taking will deliver growth for Vodafone this year and a further acceleration into FY26.”

Vodafone reiterated its guidance to produce core earnings of around 11 billion euros and adjusted free cash flow of at least 2.4 billion euros for the full year.

($1 = 0.9403 euros)

(Reporting by Paul Sandle; editing by Sarah Young and Sachin Ravikumar)