Vodafone profit soars to 8.6 billion pounds

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British mobile phone giant Vodafone said on Tuesday that its annual net profits almost trebled to 8.645 billion pounds on reduced write-downs and increased sales of its broadband Internet services.

The world's biggest mobile phone operator by revenue said profit after tax soared to the equivalent of 10.1 billion euros or 12.5 billion dollars in the 12 months to March 31 -- beating its own expectations.

Vodafone had posted net profits of 3.078 billion pounds in 2008/09.

The strong results also came despite Vodafone booking an impairment charge of 2.3 billion pounds relating to its operations in India because of fierce competition.

In 2008/09, Vodafone had suffered impairment charges of 5.9 billion pounds, including a 3.4 billion-pound write-down on the value of Vodafone's Spanish assets and smaller one-off charges related to operations in Turkey and Ghana.

"We have made significant progress in implementing our strategy," Vodafone chief executive Vittorio Colao said in comments accompanying the earnings data.

"We now generate 33 percent of service revenue from products other than mobile voice reflecting the shift of Vodafone to a total communications provider.

"In particular, mobile data and fixed broadband services continue to grow while we increased the contribution being made by our operations in emerging economies, primarily by gaining market share.

"We have reduced costs and working capital to manage better in the recessionary environment while maintaining investment in our networks," he added.

Vodafone had in November doubled its annual cost-savings target to two billion pounds by 2012, as it faced a large write-down in India.

"Although our operational performance in India since acquisition in 2007 has been strong, the award of six new national licences in the market one year after our entry and the resulting intense price competition have led to an impairment charge of 2.3 billion pounds, partially offset by a 0.2 billion pounds reversal related to Turkey," Vodafone said on Tuesday.

The British group had bought a majority stake in Indian mobile phone operator Hutchison Essar in 2007 as the London-listed company struggled with slowing sales in the developed world.

Vodafone said on Tuesday that group revenue increased by 8.4 percent to 44.5 billion pounds in 2009/10, boosted by performance in Asia and the Middle East. It meanwhile had 341 million mobile phone customers after gaining 8.5 million during the fourth quarter (Q4).

"Vodafone's financial results exceeded our upgraded guidance on all measures," said Colao.

"Revenue trends have improved again in quarter four driven by growth in mobile data and fixed broadband. Cost reduction targets were delivered ahead of schedule enabling commercial reinvestment to improve market share and further strengthen our technology platforms," the chief executive added.

In early London trade, Vodafone's share price fell 0.76 percent to 137.39 pence on the benchmark FTSE 100 index, which was up 1.15 percent.

The company on Tuesday said it was targeting an annual dividend per share growth of no less than seven percent for the next three financial years.

© 2010 AFP

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