British mobile phone giant Vodafone on May 22 said annual net profits dropped almost 13 percent as eurozone losses offset asset sale gains and strong performances in emerging markets and the US. Vodafone said profit after tax hit £6.957 billion (8.6 billion euros, $11.0 billion) in the 12 months to March 31, down 12.7 percent compared with 2010/11.
Revenue rose 1.2 percent to £46.4 billion in 2011/12. Although the company made a net gain of £3.5 billion from selling its stakes in SFR and Polkomtel, Vodafone also "recorded impairment charges of £4.0 billion relating to our businesses in Italy, Spain, Portugal and Greece."
It added in an earnings statement that the charge was "primarily driven by lower projected cash flows within business plans and an increase in discount rates, resulting from adverse changes in the economic environment."
Vodafone chief executive Vittorio Colao said the company's overall financial performance in 2011/12 had been "steady." He added: "Our major emerging markets operations have had a very strong year.
In addition, Verizon Wireless, our 45-percent owned associate in the United States, combined continued good revenue growth with substantial cash flow. "On the other hand, the tough macroeconomic and regulatory environment in much of Europe has made revenue growth in that region increasingly challenging."
In its last financial year, Vodafone sold its 44-percent stake in French mobile phone operator SFR for £6.8 billion and its 24.4-percent interest in Polish peer Polkomtel for £800 million.