Vodafone sees profits surge

 
Steve Dinneen
Follow Steve
VODAFONE saw its full-year profits surge despite taking a £6bn impairment charge on its businesses in Spain, Greece, Portugal, Italy and Ireland.

It was buoyed by fast-growing markets in India, South Africa and Turkey, and the rapid uptake of higher-margin smartphones. Pre-tax profits grew 9.5 per cent to £9.5bn, on revenues up 3.2 per cent to £45bn. Service revenue, which includes ongoing facilities such as voice, data, texts and internet access but not one-off costs like handsets, was also ahead of forecasts.

UK revenue was £5.3bn, up five per cent year-on-year, driven by almost 1m additions to its contract customer base. Vodafone said it is gaining customers from both Everything Everywhere and O2, its main rivals in the UK.

Chief executive Vittorio Colao said he could not shed any new light on when its senior US joint venture partner Verizon may resume paying a dividend on Vodafone’s 45 per cent stake.

He said Vodafone will continue to cooperate with its partner and would not speculate on whether his firm will eventually sell its interest – or indeed buy out Verizon.

He also slammed the way Indian authorities are hounding his company for a disputed £2.5bn tax-bill relating to its purchase of Hutchison’s Indian operations.

Colao insists that as the acquirer, Vodafone is not responsible for paying capital gains tax on the transaction, which was handled offshore and therefore not necessarily under Indian juristiction.

He suggested an IPO of up to three per cent of Vodafone Essar – which it will be required to sell after the closure of its £3bn buyout of partner Essar as a result of foreign ownership regulations – may rely on a positive outcome in the tax case.

He said the Mumbai stock exchange would benefit from having a company of Vodafone’s “dignity” on its books.