Vodafone posts losses of STG15 billion

30-05-2006

by Ciara O'Brien

Vodafone recorded full-year pre-tax losses of almost STG15 billion for the group, but announced a STG3 billion windfall for shareholders in August.

The loss was mainly attributed to the writing down of assets, which generated an impairment charge of more than STG23.5 billion.

Impairment charges aside, the firm reported a fall in full-year profit of 12 percent, as expected, and predicted revenue growth of between 5 percent and 6.5 percent for next year. Pre-tax profit for the year to 31 March slumped STG8.79 billion from STG7.83 billion a year earlier, while revenue rose to STG29.3 billion from STG26.6 billion.

Adjusted basic earnings per share rose by 13 percent to STG0.10 pence, while basic loss per share was STG0.28 pence. Meanwhile, the mobile firm is planning to return some STG6 billion to shareholders from the sale of its Japanese subsidiary, plus an extra STG3 billion, through a "B" share arrangement after its AGM.

Vodafone Ireland continues to perform well. Irish customers used almost 10 percent more voice minutes during the last 12 months, with voice usage per customer in Ireland topping the group's European subsidiaries.

The growth in voice usage fuelled a 5.9 percent growth in service revenue for the Irish subsidiary. Despite the increase in use on the voice services, monthly average revenue per user (ARPU) fell during the last quarter, from more than EUR50 to EUR48.60. This continues the steady fall seen since September 2005, when monthly ARPU was at EUR53.10.

During the final quarter, Vodafone Ireland added some 28,000 customers to its subscriber base, bringing the current total to 2,075,000. Group-wide, the firm added some 21.5 million customers to its subscriber list, bringing the total number to 170.6 million.

Group revenue from continuing operations reached STG29.4 billion, with organic growth of 7.5 percent. Mobile telecommunications revenue grew to STG28.1 billion, experiencing organic growth of 6.7 percent.

Non-messaging data revenue for the group also rose during the year, growing some 61 percent to STG0.8 billion, with organic growth of 60.4 percent.

Arun Sarin, chief executive of the Vodafone group, described Vodafone's performance during the year as "robust".

"Vodafone has met or exceeded expectations, outperforming its competitors in an increasingly challenging marketplace," he said in a statement.

The telecoms firm also announced on Tuesday that it was to cut some 400 jobs, in a bid to slash costs. However, it was good news for Irish staff as the company insisted that the job losses would not affect Vodafone's operations here.

The mobile network employs more than 1,800 people in Ireland, and Irish operations are among the most lucrative for the telecoms group. Irish customers spend an average of EUR583 a year on their mobile bills.