London (AFP) – British mobile phone giant Vodafone said Tuesday that it sharply reduced its annual losses as it undergoes major restructuring to refocus on its core markets after years of weak performance. Net losses narrowed to 397 million euros ($466 million) in the year to the end of March, down from 4.2 billion euros a year earlier.
“After the transformation of the last three years, we are now a simpler company with a stronger growth outlook,” said chief executive Margherita Della Valle. The CEO launched a sweeping overhaul of the company in 2023, including thousands of job cuts and the sale of its operations in Italy and Spain.
Vodafone’s revenue rose in its last fiscal year by eight percent to 40.5 billion euros, helped by strong growth in service sales and the merger of Vodafone UK with Three. However, service revenue in Vodafone’s main market, Germany, declined over the year, despite signs of improvement towards the end of the period. Its German market has struggled since legislation in the country prevented housing associations from bundling TV contracts with rent.
Following the update, shares in the company slid five percent on London’s top-tier FTSE 100 index. Since the start of the year, however, Vodafone’s stock has gained 16 percent. “There are increasing signs that the transformation is beginning to reap rewards,” said analyst Richard Hunter, head of markets at Interactive Investor. He said Vodafone had become “a smaller and less geographically diverse, but more focused operation.”
Hunter warned, however, that “years of underperformance weigh heavily on investors’ minds and it will take some time for those memories to be erased.” Vodafone last week announced it would take full ownership of Britain’s biggest mobile phone operator, Vodafone Three. Under the deal, Vodafone will buy out Hong Kong-based CK Hutchison’s 49-percent stake in the company for £4.3 billion ($5.8 billion).
© 2024 AFP
