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Vodafone Reports Strong Net Profit of GBP 59 Billion on Verizon Sale

Vodafone Reports Strong Net Profit of GBP 59 Billion on Verizon Sale

By Agence France-Presse | Updated: 20 May 2014 13:44 IST

Vodafone's annual net profit rocketed to £59.25 billion, boosted by the enormous sale of its stake in US joint-venture Verizon Wireless, the British mobile phone giant said on Tuesday.

Earnings after taxation surged to the equivalent of $100 billion or 73 billion euros in the year to March 31.

That compared with £413 million in 2012/2013, when the group was hit by special charges.

Revenues dipped 1.9 percent to £43.6 billion, Vodafone added in a results statement.

The London-listed group agreed to sell its 45-percent holding in joint venture Verizon Wireless in 2013 to partner Verizon for $130 billion in a move to strengthen its strategy, boost infrastructure investment and slash debt.

(Also see: Verizon agrees $130 billion deal to buy Vodafone's stake in Verizon Wireless )

The deal generated a huge capital gain, and the company has used part of the proceeds to return $85 billion to shareholders, and made strategic acquisitions including the purchase of Spanish cable firm Ono and Kabel Deutschland (KDG), the largest cable operator in Germany.

"It has been a year of substantial strategic progress," said chief executive Vittorio Colao in the statement.

"The sale of our Verizon Wireless stake has rewarded shareholders for their support, and enabled the acceleration of our strategy through the acquisition of KDG, the pending acquisition of Ono and our Project Spring investment programme."

Turning to the outlook for 2014/2015, Vodafone forecast underlying earnings or profit before interest, tax, depreciation and amortisation (EBITDA) would fall to between £11.4 billion and £11.9 billion, compared with £12.8 billion in 2013/2014.

The group added that EBITDA was expected to drop owing to investment costs and foreign exchange movements.

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