comscore Vodafone profits warning sends share price slumping
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Vodafone profits warning sends share price slumping

Vodafone earnings will drop this year, in part due to rising costs, the British mobile phone giant warned today as it slashed the value of its European operations. Vodafone's share price slumped after

  • Published: May 21, 2014 1:22 PM IST
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vodafone1Vodafone earnings will drop this year, in part due to rising costs, the British mobile phone giant warned today as it slashed the value of its European operations. Vodafone’s share price slumped after the group forecast that underlying earnings — or profit before interest, tax, depreciation and amortization (Ebitda), would fall to between $9.1 billion and $ 20 billion in 2014/2015. That compared with Ebitda of 12.8 billion pounds in 2013/2014, the company said in its annual results statement. Also Read - Vi just reduced the daily data limit for these prepaid plans: Check details

Vodafone, which has struggled for years with maturing markets in Europe, also took a 6.6 billion pounds charge against its assets in Germany, Spain, Portugal, Czech Republic and Romania. Revenues dipped 1.9 percent to 43.6 billion pounds in 2013/14, hurt by the pressures in Europe. The grim news sent Vodafone’s share price diving 5.92 percent to 204.29 pence on the British capital’s FTSE 100 index, which was 0.57-percent lower at 6,805.58 points. Vodafone also revealed today that annual net profits rocketed to 59.3 billion pounds in the group’s financial year to March 31 but only because of a huge one-off gain. Also Read - Reliance Jio vs Vi vs Airtel: Best 4GB daily data prepaid plans under Rs 600

The group had registered net profit of just 413 million in 2012/2013. However, profits for Vodafone’s last financial year were skewed by the enormous sale of its stake in US joint-venture Verizon Wireless. The London-listed group agreed to sell its 45-percent holding in joint venture Verizon Wireless in 2013 to partner Verizon for $130 billion in a move to strengthen its strategy, boost infrastructure investment and slash debt. Also Read - YouTube, Gmail, Google Maps stops working on these phones from today: Check if your phone is in the list

The deal generated a huge capital gain, and the company used part of the proceeds to return $ 85 billion to shareholders. Vodafone has also made a concerted push into the cable pay-television industry, amid broader consolidation in the global sector. The British mobile phone giant has made strategic acquisitions including the purchases of Kabel Deutschland (KDG), the largest cable operator in Germany, and Spanish cable firm Ono.

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  • Published Date: May 21, 2014 1:22 PM IST



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