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British mobile firm Vodafone Group (LSE:VOD) reported that the mobile phone giant had a “steady” performance for the 12 months ending 31stMarch 2012, affected by a “weaker euro” and “tough macroeconomic and regulatory environment” in Europe.
Revealing its annual performance to the public, Vodafone indicated “impairment charges” amounting to £4 billion for its operations inItaly, Portugal, Spain, Greece – the countries hit the hardest by sovereign debt crisis.
Financial Highlights
Vodafone Group said it was able to either hold or gain share in most of its major markets finishing the year with 1.2% increase in revenue to £46.4 billion.
However, EBITDA fell 1.3% at £14.5 billion, blaming continuing high levels of commercial costs in migrating to smartphones and singling out the “difficult trading environment” in Spain.
Profit was diminished as a result of the loss in revenue from the French mobile phone company SFR, after Vodafone sold its 44% stake for £7.02 billion, and the Polish mobile phone Polkomtel, owned by Vodafone for 24.4% stake and which was sold at $6.5 billion.
On the other hand, Vodafone posted £3.5 billion net gains from the disposal of both assets and the company was able to keep £6.1 billion of cash, after capital expenditures of £6.4 billion, meeting the forecast set by the company.
Most of Vodafone’s net income came from its 45% interest in the US mobile phone company Verizon Wireless, representing 42.2% of the company’s adjusted operating profit. Vodafone received £4.9 billion from its share of profit in Verizon Wireless that enabled the company to provide a special dividend of 4 pence a share, totalling £2 billion.
Outlook
The company views the conditions Europe to “remain very difficult”, citing “weak consumer demand from poor macroeconomic conditions, harsh regulatory backdrop and ongoing competition” will “create material barriers to growth”.
“Our focus on the key growth areas of data, emerging markets and enterprise is positioning us well in a difficult macroeconomic environment,” stated Vodafone’s Group Chief ExecutiveVittorio Colao.
“Our goal over the next three years is to continue to strengthen our technology and commercial platforms through reliable and secure high speed data networks, significantly enhanced customer service across all channels, and improved data pricing models, to enrich customers’ experience and maximise our share of value in the markets in which we operate,” CEO Colao concluded.
Company Spotlight
Vodafone Group is the world’s largest mobile phone company by revenue, operating in more than 30 countries with more than 371 million subscribers.
A member of the London Stock Exchange since 1988, Vodafone is part of the FTSE 100 Index. At the close of trading in London today, shares of the company gained 3.39% to £1.70, following the announcement.
