Vodacom Group parent Vodafone Group reported second-quarter sales growth that beat analysts’ estimates after posting a surprise growth in service revenue in Germany, its biggest market, following price hikes.

Overall organic service revenue in the second quarter rose 4.7%, the Newbury, England-based phone carrier said in a statement on Tuesday. That compared with analysts’ average forecast of a 4.1% increase.

CEO Margherita Della Valle, who took the top job in April, is working to turn around the telecommunications giant’s share price, which has declined about 26% in the last 12 months. The company raised prices across its biggest European markets this year, increasing subscribers’ average monthly bills and taking the risk that customers would not seek out lower-cost plans at rivals.

German service revenue grew 1.1% in the second quarter when analysts had expected a 0.5% decline. The higher-priced plans helped offset a decline in device sales, an industrywide trend as customers hang on to smartphones for longer.

Della Valle, who has said the makeover will “not be a quick fix”, also oversaw 2 700 job cuts in the first half of the year, part of a programme to reduce employee numbers by 11 000 that she announced in May.

She’s also agreed on two major deals this year: a buyout of its British venture with CK Hutchison Holdings, and a sale of its long-challenged Spanish unit.

The carrier said it expects adjusted earnings before interest, taxes, depreciation and amortisation and after leases to remain “broadly flat” at €13.3-billion for the financial year ending in March 2024. That compares with analysts’ €13.2-billion forecast, according to the average of estimates. The company also reiterated its dividend.

Positive quarter

Vodafone’s earnings follow a relatively positive quarter from its biggest competitors. Orange’s earnings rose, Telefonica set out a multiyear plan to increase profits, and Deutsche Telekom, which also owns a majority of T-Mobile US, upgraded its earnings guidance.

Vodafone’s majority-owned African subsidiary Vodacom Group reported earnings for the first half that missed analysts’ estimates on Monday. But its acquisition in Egypt pushed up revenue and cemented it as Africa’s most valuable mobile operator.

Read: Vodacom interim profit hit by Ethiopia start-up losses

Vodafone’s shares rose 1.3% to close at 77.4p in London trading on Monday. The stock had declined 8.1% this year. That compares with a 2.6% gain in the Stoxx 600 Telecommunications Index of European companies. — Thomas Seal, (c) 2023 Bloomberg LP