VODAFONE Group PLC, the world's biggest mobile phone company by sales, announced the surprise resignation of chief executive Arun Sarin yesterday as it posted a return to full-year net profit after a loss the previous year.

Sarin, who spearheaded Vodafone's expansion into emerging markets like India, Turkey and the Czech Republic over his five years in the top job, will be replaced by his deputy, Vittorio Colao.

Sarin, 53, faced disquiet two years ago when nearly 10 percent of Vodafone shareholders voted against his re-election as chief executive amid unhappiness about the acquisition-heavy expansion strategy and calls for the company to spin-off its stake in US subsidiary Verizon Wireless.

But Vodafone has since outperformed analysts' forecasts and enjoyed revenue growth in emerging markets. Its global customer base has more than doubled from 120 million to 260 million under the Indian-born Sarin's tenure, and the company's share price has risen by about one-third over the same period.

Hargreaves Lansdown analyst Richard Hunter noted the previous criticism of Sarin and said it appeared the CEO "has now decided to quit while ahead."

While the timing of the Sarin announcement surprised some, the nomination of Italian-born Colao, 46, as his successor was largely expected.

Shares in the company rose 1 percent to 164.95 pence (US$3.25) on the London Stock Exchange, bolstered by both the smooth succession plan and the strong full-year results.

Vodafone posted a net profit for the year to March 31 of 6.76 billion pounds, compared to a net loss of 5.29 billion pounds a year earlier when impairment charges on its Italian and German operations hurt earnings.

The move to net profit was also driven by cost reduction and outsourcing programs in west Europe. Revenues increased 14 percent to 35.5 billion pounds, from 31.1 billion pounds the year before.

"With full year results and outlook better than anticipated, helped by an FX tailwind, and a new CEO to take the company forward, we would expect earnings upgrades to continue and expect today's announcements to be well received," said Collins Stewart analyst Mark James. "FX" refers to favorable foreign-exchange rates.

Sarin said he "felt the timing was right to hand over as the company is in a good position strategically."

"I've achieved what I set out to achieve when I took the position," he added in a conference call.