Vodafone Hails Signs of Stabilization in Europe

By Simon Zekaria 

LONDON-- Vodafone Group PLC on Tuesday hailed signs of stabilization in its key European telecommunications markets, even as the mobile telecom giant reported a fall in full-year profit.

The U.K.-based company said its net profit in the year to March 31 fell to GBP5.76 billion ($9.01 billion) from GBP59.3 billion in the same period last year. Last year's result was boosted by the sale of its U.S. wireless operations in a landmark deal worth $130 billion, for which it received a one-off contribution of GBP48.2 billion.

Operating profit adjusted for exceptional items--a key performance metric--fell 19% to GBP3.51 billion as the company invested in its network.

It posted earnings before interest, tax, depreciation and amortization of GBP11.9 billion, up 7.5% year-over-year. It forecasts Ebitda in the range of GBP11.5 billion to GBP12 billion in fiscal 2016.

Revenue rose 10.1% year-over-year to GBP42.2 billion. But revenue excluding handset sales, as well as acquisitions and disposals, fell 1.6%.

"We have seen increasing signs of stabilization in many of our European markets, supported by improvements in our commercial execution and very strong demand for data," said Chief Executive Vittorio Colao.

Newbury, England-based Vodafone is using a large portion of its funds to improve network quality and speed across Europe, where high competition and a squeeze on consumer spending has dragged down sales for telecom operators.

In its emerging markets, a "good growth trend has continued," said Mr. Colao.

Vodafone said it would pay a dividend of 11.2 pence a share, up 2%.

Write to Simon Zekaria at [e-mail]

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