Vodafone (VOD) said Monday that it posted a first half operating loss after taking a €5 billion writedown on its key business in India, but the group reported better-than-expected core earnings as markets in Europe improved.
Group revenues for the six months ending in September fell to €27.05 billion, the company said, down from €28.15 billion in the same period last year. Vodafone reported an operating loss of €4.7 billion, translating to a basic loss per share of 18.38 euro cents€. The Group raises in first half dividend, however by 1.9% to 4.74 euro cents per share.
Vodafone said the India writedown was drive by "lower projected cash flows within our business plan as a result of increased competition in the market."
Earnings before interest, tax, depreciation and amortization, however, came in at €7.9 billion, down 1.7% from the same period last year on a reported basis but marginally ahead of analysts's forecasts of €7.8 billion and up 4.3% on an organic, or constant-currency basis.
"Competition in India has increased in the year, reducing revenue growth and profitability," said CEO Vittorio Colao. "We have responded to this changing competitive environment by strengthening our data and voice commercial offers and by focusing our participation in the recent spectrum auction on acquiring frequencies in the more successful and profitable areas of the country."
"Overall, we expect to sustain our underlying performance in the second half of the year and remain on track to meet our full-year objectives despite macroeconomic uncertainties," Colao said. "This performance allows for improved returns to our shareholders, as reflected by the growth in the interim dividend."