Vodafone dials up huge R91bn annual net loss

VODAFONE logged a large annual net loss yesterday after slashing the value of its troubled Indian division, but underlying earnings soared on a solid European performance.

The British mobile phone giant posted a loss of ß6.3-billion (R91-billion) for the 12 months to March, after a net loss of ß5.4-billion (R78.2-billion) in the previous financial year, it said.

The loss was driven by tax changes and a ß3.7-billion (R54-billion) impairment at its Indian division, which Vodafone is turning into a joint venture.

However, underlying or operating profit excluding exceptional items almost tripled to ß3.7-billion (R54-billion) on cost-cutting – and a solid showing in Europe.

Vodafone shares rallied 4% after it also ramped up the shareholder dividend by 2%, taking the total payout to ß14.77.

“Our focus on excellence in customer experience has enabled further improvements in our overall commercial and financial performance during the year,” chief executive Vittorio Colao said.

Sales declined 4.4% to ß47.6-billion (R689-billion) on adverse foreign exchange movements.

Vodafone is the world’s second-largest cellphone carrier in terms of subscriber numbers, trailing global leader China Mobile.

In the first half, Vodafone initially took a non-cash impairment of ß5-billion (R72-billion) on its Indian activities and blamed a sharp rise in competition.

However, in March, Vodafone announced the merger of its Indian unit with Idea Cellular to create India’s largest telecoms operator and fight ultracompetitive new player, Reliance Jio.

Following the deal, Vodafone said yesterday it had partially reversed the Indian impairment – but it still stood at ß3.7-billion (R54-billion).

The group offloaded its 45% stake in Verizon Wireless in 2015 for a colossal ß130-billion (R1.8-trillion), one of the biggest transactions in corporate history.

Last year, Vodafone sold its Dutch fixed-line business Vodafone Thuis to Germany’s T-Mobile for an undisclosed amount.

The sale followed the merger of Vodafone Netherlands with Liberty Global’s Dutch division Ziggo into a joint venture.