Vodafone beats growth expectations

Vodafone has reported pre-tax profits of 8.7 billion, exceeding its growth targets for the financial year to March.

Smartphones provided a boost to Vodafone's results as data revenue exceeded 4 billion for the first time. Fixed line revenue, meanwhile, grew by 7.9 per cent to 3.3 billion.

The communications giant saw its group revenue increase by 8.4 per cent to 44.5 billion, while its free cash flow went up by 26.5 per cent to 7.2 billion.

A 1 billion cost saving initiative was delivered a year ahead of schedule, providing a boost to Vodafone's performance, and a new, similar programme is already underway.

Vodafone now has 341 million mobile customers, 8.5 million of which joined in the fourth quarter of 2009.

"Vodafone's financial results exceeded our upgraded guidance on all measures," said Vodafone chief executive Vittorio Colao in a statement.

"We arecreating a stronger Vodafone, which is positioned to return to revenue growth during the 2011 financial year, as economic recovery should benefit our key markets," Colao added.

For the financial year 2011, Vodafone expects to see its adjusted operating profit to be between 11.2 billion and 12 billion.

It was not all good news for the UK-based firm, however, with difficulties in the Indian market. Six new national licenses in the country have led to an "intense price competition", resulting in an impairment charge of 2.3 billion.

Vodafone has had a mixed 2010 so far. In April, the company saw its brand value drop by 17 per cent, according to the 10 most valuable brands list from Millward Brown.