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Vodafone knocks up a profit

Japan still struggling

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Vodafone posted respectable results for the year ended 31 March, 2005 but is still struggling to get its Japanese division back on track.

The mobile giant brought in revenues of £34.1bn, up four per cent on last year, and earnings per share of 10.41 pence. Profits before tax and exceptional items grew three per cent to £10.3bn. But after goodwill write-offs Vodafone lost £7.5bn in the year.

Subscriber numbers grew 12 per cent in the year to 154.8 million in 26 markets. Vodafone had 2.4 million 3G devices in use at year end.

The company said Japan was still a difficult market thanks to strong competition especially for 3G services. Revenue fell slightly with a five per cent fall in service revenue offset by higher handset prices. Arpu also fell as the company lost higher value customers. Vodafone hopes recent management changes will help improve results.

Vodafone UK grew revenue by six per cent in what it described as “an intensively competitive market”. Contract churn was reduced by focussing on business customers - rates at year end fell from 24.9 per cent to 22.7 per cent. Non-voice revenues grew by 23 per cent.

Vodafone also said it will stop providing subscriber growth figures because people using many SIM cards and the various ways operators add up the numbers make them irrelevant. Vodafone will continue to provide quarterly subscriber numbers

Looking forward the company predicts organic growth in proportionate mobile revenue to increase between six and nine per cent. The company also warned that it expects proportionate mobile EBITDA margin is likely as much as one per cent lower than this year. ®

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