Vodafone full-year profit down 54%

LONDON: Vodafone Group PLC, the world's biggest mobile phone company by sales, said Tuesday that full-year profit fell 53.5 percent as the company posted heavy impairment charges on operation in Spain, Turkey and Ghana.

The writedowns of 5.9 billion pounds (US$9.1 billion) helped push net profit down to 3.1 billion pounds compared to 6.8 billion pounds a year earlier.

Revenue rose 16 percent to 41 billion pounds, boosted by the decline of the British pound.

"In Europe and central Europe, operating conditions will be challenging in the 2010 financial year," the company said.

Forecasts by the International Monetary Fund "indicate a GDP decline of 4 percent in 2009 across the Vodafone footprint within Europe and Central Europe and that unemployment could increase significantly." Vodafone said full-year revenue was up in all regions: 32 percent in Asia Pacific and Middle East, 14 percent in Europe and 11 percent in Africa and central Europe.

For the year ending March 31, Vodafone said its adjusted net profit was 9.06 billion pounds ($14 billion) compared to 6.6 billion pounds a year earlier.

The depreciation of the pound inflated revenues from the euro zone, where Vodafone earns most of its profit, but it also inflated operating costs there. Every 1 percent change in the euro-pound exchange rate translates to a 70-million-pound change in operating profit, Vodafone said.

Adjusted operating proft (before tax) was 11.8 billion pounds, up 17 percent, but Vodafone said it expected that figure to be no higher in the current year, and perhaps as low as 11 billion pounds.

The company's shares were down 0.3 percent at 127.1 pence on the London Stock Exchange.