Vodafone reports H1 loss related to impairment charges in Spain and Italy

Vodafone Group reported a loss for the first half of 2012, as a result of a nearly GBP6 billion (U$9.75 billion) charge related to its Spanish and Italian businesses.

In a statement, Vittorio Colao, Group CEO, said: “We have continued to make progress on our strategic priorities over the last six months, with good growth in data and emerging markets in particular”.

For the half year, the company reported a loss of GBP1.89 billion, compared with a prior-year profit of GBP6.64 billion, on revenue of GBP21.78 billion, down 7.4 per cent from GBP23.52 billion.

Service revenue was GBP20.16 billion, down 7.9 per cent.

The company recorded impairment charges of GBP5.9 billion for Spain and Italy, as a result of “challenging market conditions and changes to discount rates”.

Service revenue for Northern and Central Europe fell 2 per cent to GBP9.05 billion, and for Africa, Middle East and Asia Pacific it decreased 5.1 per cent to GBP6.05 billion.

High spots included strong service revenue growth in Turkey, as a result of continued expansion of the contract customer base, strong growth in data revenue, strong growth in incoming traffic, and an increase in enterprise revenue.

India also saw solid growth, due to an increase in the customer base, increased usage, and an increase in charges for outgoing calls. Vodacom performed well, mainly driven by growth in Tanzania, Democratic Republic of Congo and Mozambique.

The company noted that revenue from non-voice services and emerging markets has increased to 65 per cent in the first half fiscal of 2013 from 56 per cent in H1 2011, “reducing our dependence on voice revenue in mature markets”.

For the rest of the financial year, Vodafone expects the environment to be “similar” to that seen in the first half.