Vodafone swings to 1H loss on the back of asset write-downs in Europe

14 Nov 2006

UK-based mobile group Vodafone reported a net loss of GBP5.04 billion (USD9.57 billion) in its fiscal first half year, compared to a profit of GBP2.818 billion a year earlier, on the back of an GBP8.1 billion impairment charge for writing down the value of its operations in Germany and Italy. The company said it was ‘on track’ to meet pre-tax profit predictions of GBP4.8 billion before the charges were taken into account. Revenues in the six months ended 30 September 2006 rose 7.2% year-on-year to GBP15.594 billion, as growth in emerging markets – including Egypt, South Africa and Romania – and acquisitions helped offset price pressure in Europe. The number of customers, based on proportionate ownership, rose by twelve million over the period to reach a total 191.6 million. EBITDA, excluding one-time items, rose 5.7% to GBP6.242 billion. Despite swinging to a loss the group increased its interim dividend by 6.8% to GBP0.235 per share. Vodafone repeated its outlook for full-year organic mobile revenues to show growth of between 5% and 6.5%, while EBITDA margins will fall in the fiscal second half due to competitive pricing in Europe, particularly the UK and Germany. The group remains focused on stimulating revenues and cutting costs in its main market of western Europe, where it plans to launch fixed line services in three new countries by March 2007.

‘Competitive and regulatory pressures in the European region have been offset by strong performances in our developing markets and the US. We have also made good progress since May in the execution of our new strategy and the response to our new products and services has been very encouraging,’ Vodafone chief executive Arun Sarin said in a statement.

United Kingdom, Vodafone Germany (old), Vodafone Group, Vodafone Italy