Vodafone profits plunge 50% on writedowns

May 19, 2017

Vodafone said today that it will continue its tight discipline in cutting costs to counter weaker revenues from voice and messaging in Europe.

Reporting its results for year ending 31 March 2017, the telecoms giant posted a 50% fall in net profits to £3.1 billion despite overall revenues increasing 15.6% to £41.0 billion and the results being propped up by the weakness of the pound.

Europe-generated revenues rose 13.6%, but a drop in calling levels and prices have dented profitability.

In addition, credit crunched business people and consumers are travelling less, stunting Vodafone’s roaming cash flow.

The main reason for the drop in profit, however, was a £3.4 billion write-down on its Spanish subsidiary, as well as writedowns totalling £2.5 billion in Turkey and Ghana.

Net debt rose to £34 billion, with foreign currency movements blamed for £9 billion of the rise.

Investors were paid a final dividend of 5.2 pence per share, giving a total dividend of 7.77p, up 3.5% compared to last year.

CEO Vittorio Colao said the firm’s £1 billion cost reduction strategy is making “good progress” and is “ahead of plan”.

“We maintain our tight focus on capital discipline and returns to shareholders, he added.

Shares in the company slipped 0.5% to 126.8 pence during morning trading.