Vodafone Group PLC on Tuesday said it is making progress as the
mobile telecom giant's full-year net profit soared following the
sale of its U.S. wireless operations.
The world's second-largest mobile operator by subscribers after
China Mobile Ltd. said net profit in the fiscal year to March 31
rose to GBP59.3 billion ($99.7 billion) from GBP413 million in the
year-earlier period.
Earlier this year, Vodafone completed the landmark sale of its
45% stake in Verizon Wireless to U.S. counterpart Verizon
Communications Inc. for $130 billion, for which it received a
one-off contribution of GBP48.2 billion. The group also said it
benefited from deferred tax assets, while last year's net earnings
were hit by impairment charges.
Operating profit adjusted for exceptional items--a key
performance metric--fell 37% to GBP7.87 billion, reflecting a five
month contribution from Verizon, against a full 12 month
contribution in the previous year. Vodafone guided for adjusted
operating profit of around GBP5 billion.
Revenue fell 1.9% to GBP43.6 billion, versus market expectations
of GBP43.4 billion, amid the company's high exposure to sluggish
European telecom markets.
Vodafone said its emerging markets, which include India and
Turkey, continue to deliver strong results, but it recorded
impairment charges in Europe where there are macroeconomic
pressures.
"It has been a year of substantial strategic progress," said
Chief Executive Vittorio Colao. "[But] our operational performance
has been mixed."
Newbury, England-based Vodafone is using a large portion of
funds from the Verizon deal to improve network quality and speed
across Europe, where high competition and a squeeze on consumer
spending has dragged down sales.
Flush with cash, Vodafone is focused on deal-making in Europe's
fragmented telecom sector as mobile operators seek fixed-line
assets to shore up stagnating wireless businesses.
The group declared a fiscal-year dividend a share of 11 pence,
up 8% on the prior year.
Write to Simon Zekaria at simon.zekaria@wsj.com
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