Annual profit slumps on eurozone woes: Vodafone

LONDON - Agence France-Presse

Vodafone said yesterday that annual net profits tumbled 90 percent in 2012 as earnings after taxation plummeted to 673 million pounds.

British mobile phone giant Vodafone said yesterday that annual net profits tumbled 90 percent after taking a vast impairment charge relating to its businesses in debt-laden eurozone nations Italy and Spain.

Earnings after taxation nosedived to 673 million pounds ($1.03 billion, 796 million euros) in the group’s financial year to the end of March, compared with 7 billion pounds in 2011-2012, Vodafone said in a results statement.

Group revenues retreated 4.2 percent to 44.44 billion pounds.

Vodafone’s businesses in Italy and Spain have been hit hard by the impact of the ongoing eurozone sovereign debt crisis.

The company said that it took a second-half hit of 1.8 billion, taking its total impairment charge to 7.7 billion pounds for Italy and Spain. “We have faced headwinds from a combination of continued tough economic conditions, particularly in Southern Europe, and an adverse European regulatory environment,” said Vodafone chief executive Vittorio Colao in the statement.

“The board remains focused on balancing ongoing shareholder remuneration with the long-term investment needs of the business, and going forward aims at least to maintain the ordinary dividend per share at current levels,” he added. The company will meanwhile take a 3.2-billion pounds dividend from U.S. company Verizon Wireless, in which Vodafone has a 45-percent stake.

Vodafone forecast that adjusted operating profit would stand at between 12-12.8 billion pounds in 2013-2014 financial year.