Wednesday, May 22, 2013

Vodafone profit plunges by 90 percent on euro zone crisis

London: 22 May 2013,

British mobile phone giant Vodafone on Tuesday reported a 90-percent plunge in annual net profit after taking a vast impairment charge relating to poor business in debt-laden euro zone nations Italy and Spain.

Updating the market, Vodafone was silent surrounding recent speculation that it may offload its sizeable stake in Verizon Wireless, the US mobile operator.

Profit after tax nosedived to 673 million pounds (USD 1.03 billion) in the group\'s financial year to the end of March from 7.0 billion pounds in 2011-2012, Vodafone said in a results statement.

\"We have faced headwinds from a combination of continued tough economic conditions, particularly in Southern Europe, and an adverse European regulatory environment,\" Vodafone chief executive Vittorio Colao said in the statement.

Group revenues retreated 4.2 per cent to 44.44 billion pounds. Vodafone\'s businesses in Italy and Spain have been hit hard by the impact of the ongoing euro zone sovereign debt crisis.

The company said that it took a second-half hit of 1.8 billion pounds, taking its total impairment charge to 7.7 billion pounds for Italy and Spain.

Despite the plunge in profits, Vodafone\'s full-year shareholder dividend stood at 10.19 pence a share, up seven percent from the previous year.

The company took a dividend of its own totaling USD 3.2 billion from Verizon Wireless, in which Vodafone has a 45-percent stake.

Colao told reporters that Vodafone had \"nothing new to announce\" about its stake in Verizon, despite ongoing media speculation, noting simply that it was \"fantastic asset\".

Verizon Wireless last month denied speculation it was preparing a joint bid with AT&T to buy out Vodafone, in a reported deal that would see Verizon snap up the British group\'s 45-percent stake.

\"As Verizon has said many times, it would be a willing purchaser of the 45 percent stake that Vodafone holds in Verizon Wireless,\" the US company said at the time.

\"It does not, however, currently have any intention to merge with or make an offer for Vodafone, whether alone or in conjunction with others,\" it added in a statement at the start of April.

Turning to the outlook, Vodafone on Tuesday forecast that adjusted operating profit would stand at between12.0 billion pounds -12.8 billion pounds in the current 2013-2014 financial year.

In late deals, Vodafone\'s share price was up 0.68 per cent to 198.95 pence on London\'s FTSE 100 index of leading companies, which was rising 0.36 percent at 6,780.27 points.
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