Vodaphone writes down business to register huge loss

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Vodaphone writes down business to register huge loss

Tash Shifrin

Mobile communications firm Vodaphone has posted a £14.9bn loss in its annual results after writing down the value of its businesses in Europe by more than £23.5bn.

The company announced that it will outsource its IT application development and maintenance activities in a bid to reduce costs in its European business.

The outsourcing is aimed at achieving savings of 25-30% on current annual costs of £560m within three to five years. Centralisation of network supply chain management and regional consolidation of Vodaphone’s data centres will also form part of the package of measures that will see 400 jobs axed.

The company saw revenues of £29.4bn in the year ending 31 March, but recorded a one-off charge of £23.5bn, reflecting a revised view of its prospects in Germany, Italy and Sweden. Vodaphone’s German business accounted for £19.4bn of the write-down.

This was “the primary reason” for the operating loss of £14.9bn, compared with an operating profit of £7.9bn in the previous financial year, the company said. Excluding the one-off charges, Vodaphone made operating profits of £8.8bn before tax.

Vodaphone’s mobile telecommunications revenues increased to £28.1bn, with a 61% growth in its non-messaging data revenue, while use of the mobile voice service increased by 24.6% to 178.3 billion minutes last year. It gained 21.5 million additional customers during the financial year.


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