Vodafone cuts losses, looks to improve in far east

25 May 2004

Vodafone has announced a shrinking in net loss for its fiscal year ending March 2004, thanks to strong subscriber growth and increased revenues from its value added service offerings including ringtones and music downloads. The results lead to the telco raising its final dividend by 20% to 1.08 pence, a total payout of GBP1.4 billion.

Profit on ordinary activities before tax, goodwill amortisation and exceptional items increased by 19% to GBP10 billion. After goodwill amortisation of GBP15.2 billion, the group’s net loss for the twelve months to 31 March 2004 was GBP9.02 billion (USD16 billion), compared to a loss of GBP9.82 billion the year before. Sales from its controlled subsidiaries climbed GBP3.22 billion to total GBP33.6 billion, the lion’s share of which was generated by its mobile businesses, where turnover increased 15% to GBP31.7 billion.

Vodafone said that it signed up13.7 million net new proportionate mobile customers worldwide, bringing its total customer base to 133.4 million, of which 56% were pre-paid; its net customer base across all ventures stood at 340.1 billion. Voice calls across controlled subsidiaries rose 11% to 154.8 billion minutes, whilst non-voice services continued to grow with revenues from messaging and data services accounted for 11.9% and 4.2% of total service revenues respectively, up from 11% and 3.6% a year earlier. Mobile operations in Italy and the UK reported strong growth in average revenue per user (ARPU), up 4% and 6% respectively, despite the former having one of the groups highest ratio of pre-paid users at 92%. However, its businesses in Japan, Germany, Portugal, Sweden and Australia all saw ARPU decline over the year.

The group is looking to rectify falling ARPU and market share in the Japanese market by taking full control of its operations in the country, and has announced a GBP2.6 billion buyout of minority investors at Vodafone KK (formerly J-Phone). Vodafone also announced that it is setting aside GBP3 billion for its share buyback programme; it has already retrieved GBP1.1 billion of shares via buybacks.

United Kingdom, SoftBank Corp, Vodafone Group
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