BackVodafone says first-half net profit surges to £17.95 billion
The company had suffered a net loss of 1.98 billion in the same part of the previous fiscal
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London: British mobile phone giant Vodafone Group Plc said Tuesday that it surged back into first-half profit on a huge taxation credit, and pledged to invest after the sale of its US division.
Earnings after taxation stood at £17.95 billion ($28.6 billion, €21.4 billion) in the six months to 30 September, boosted by a tax credit of almost £15 billion, it said in a results statement.
Vodafone had suffered a net loss of £1.98 billion in the same part of the previous fiscal year, when the group was rocked by impairment charges in indebted euro zone nations Spain and Italy.
The London-listed group is meanwhile using some of the proceeds from its recent blockbuster Verizon Communications Inc. deal to improve network quality and speed across Europe.
Vodafone said on Tuesday that it will invest £7 billion to boost businesses in key European and emerging markets, following its gigantic $130-billion deal to sell its US joint-venture stake to partner Verizon.
That compared with its previous plans to invest £6.0 billion. Chief executive Vittorio Colao added that the group also hoped to reward its shareholders for their loyalty.
“The pending $130-billion US transaction will reward our shareholders for their long-term support of our strategy and will provide us with a strong balance sheet, improved dividend cover and the financial and strategic flexibility to make further investments in the business or returns to shareholders in the future," Colao said.
The group had agreed the deal in September with Verizon, clinching one of the biggest transactions in global corporate history.
One month later, Vodafone completed a €7.7 billion ($10-billion) takeover of Kabel Deutschland Holding AG—the largest cable operator in Germany—as it sought to grow in Europe.
Vodafone added on Tuesday that revenues rose 1.2% to £22.03 billion in the first half, despite “tough" trade in Europe, as emerging markets continued to deliver growth.
“Whilst trading conditions in Europe remain very tough at present, we are encouraged by the forecast return to economic growth over the next two years and the potential for a shift in regulatory focus to support greater industry investment and consolidation," added Colao.
“We have continued to make good progress in delivering our long-term strategy. Our emerging markets businesses are performing very well, driven by rapidly increasing smartphone penetration and data usage.
“In mature markets, our performance reflects more challenging conditions, which we continue to mitigate through ongoing actions to improve our operating model and cost efficiency."
“This rigorous approach, plus our substantial investments in Vodafone Red, 4G and unified communications services—including our recent acquisition of Kabel Deutschland—are laying strong foundations for the future."
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