Vodafone has reported a 180% jump in its first quarter profits compared to the year before, thanks to the removal of write-downs of £5.9 billion (US$8.5 billion) that impacted its results a year ago. The company recorded a net income of £8.62 billion (US$12.4 billion), compared to £3.1 billion (US$4.5 billion) a year ago. The company also wrote down its Indian assets by £2.3 billion (US$3.32 billion) due to increased competition in the market, although it increased the valuation of its Turkish subsidiary by £200 million.
Group revenue increased by 8.4% to £44.5 billion (US$64 billion), partly boosted by the weakening UK Pound Sterling. Excluding the currency gains, revenues would have declined by 2.3%. Group service revenue increased by 8.9% to £41.7 billion.
Group EBITDA was £14.7 billion, up 1.7%. The EBITDA margin declined in line with expectations. Free cash flow, the driver of the group's dividend and its preferred measure of profitability, rose 27% to £7.2 billion, beating market expectations of £6.8 billion.
The proportionate mobile customer base was 341 million with 8.5 million net additions during Q4.
Vittorio Colao, Chief Executive, commented: "Vodafone's financial results exceeded our upgraded guidance on all measures. Revenue trends have improved again in Q4 driven by growth in mobile data and fixed broadband. Cost reduction targets were delivered ahead of schedule enabling commercial reinvestment to improve market share and further strengthen our technology platforms. Free cash flow of £7.2 billion and confidence in Vodafone's prospects have enabled us to increase dividends by 7% and to target 7% per annum growth in total dividends per share for the next three years. We are creating a stronger Vodafone, which is positioned to return to revenue growth during the 2011 financial year, as economic recovery should benefit our key markets."
Net debt declined to £33.3 billion (US$48 billion) primarily as a result of foreign exchange movements.
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