Vodafone posts strong revenue gains - losses narrow

27 May 2003

Vodafone Group [VOD.L], one of the world’s largest wireless operators, said its full-year net loss for the fiscal year to 31 March 2003 narrowed to GBP9.82 billion (USD16.1 billion) from GBP16.16 billion previously, thanks in part to strong organic growth and customers spending more on new gaming and photo messaging services. The company’s figures were adversely affected by a goodwill amortisation of GBP14.06 billion, but, nonetheless, the UK-based operator said its profit before tax, goodwill amortisation and exceptional items for the year ended 31 March rose by 36% to GBP8.43 billion from GBP6.20 billion the previous year. Sales leapt by 33% to GBP30.38 billion, including the inclusion of the first full set of results from the Group’s Japanese operations. Vodafone added 7.2 million customers in the first quarter of 2003, taking the total proportionate subscriber base to 119.7 million in 36 countries. Subscriber gains helped fuel revenue growth from new services such as photo messaging, which jumped by 73% to GBP3.66 billion in a period in which the number of people using Vodafone’s Live! services broke the one million barrier. The company expects to increase its overall subscriber base by 10% in 2003.

Vodafone is continuing to expand at a time in which rivals such as France Télécom and Deutsche Telekom are reducing spending to cut debt. In the year to 31 March 2003 Vodafone spent upwards of GBP8.7 billion on buying back bonds, taking control of mobile units in the Netherlands, Spain, Sweden and Portugal, and expanding its operations in four more European countries. Chief executive Sir Christopher Gent, who steps aside to make way for Arun Sarin in July, said his company’s financial results had exceeded expectations and in particular singled out the ‘strong year-on-year growth in operating profit’. However, it is not all good news. Vodafone has confirmed it is in the closing stages of talks to dispose of its Japanese fixed line division to New York-based investment fund Ripplewood Holdings. The announcement follows press rumours in Japan about the fate of the underperforming telecoms arm; Japanese daily newspaper Nihon Keizai, has placed a value of USD2.5 billion on the company. According to the paper, an agreement is expected to be signed as early as June.

United Kingdom