Vodafone has reported a 33% increase in revenues for the year to March.
Vodafone had been under pressure to write down its GBP14 billion third-generation investment after rival operator mmO2 last week announced it had written off GBP8.3 billion from the value of its 3G assets.
Most of the European 3G phone licenses were acquired during the telecom boom, and the mmO2 write-down was seen as an acknowledgement of the errors that carriers across Europe made in paying vast sums for 3G licenses. Vodafone admitted that it had examined a possible write-down, but decided against it in the end.
Despite the refusal to write down 3G assets, Vodafone did take exceptional accounting charges of GBP14 billion to cover goodwill on acquisitions. It believes that the decision not to make write-downs on its investments in 3G licenses can be defended, because it holds a significant market share and is in a position to squeeze long-term value from the licenses. Vodafone’s 3G network is not expected to be rolled out until 2004.
For the full year to March 31, the Newbury, UK-based wireless carrier reported a net loss of GBP9.82 billion, compared with a net loss of GBP16.1 billion, on revenue of GBP30.37 billion, up from GBP22.84 billion for the fiscal year 2002. The 33% rise in revenue was mainly attributed to the first year’s results from its Japanese operations, and a 73% rise in group data revenues (almost entirely generated by text messages).
Vodafone’s dividend rose 15% to 1.69p but still remained rather lower than many investors would have hoped for. Instead the company appears to be keeping some extra cash to one side for possible acquisitions over the coming year. The question, though, is whether Vodafone will find anything major to buy that falls in line with its strategy. If not, dividends may be considerably more pleasing to investors next year.
Source: Computerwire/Datamonitor
