Huge Annual Loss Hit for Vodafone After Problems with Indian Arm

Vodafone sees annual losses of £5.2 billion

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Vodafone
Unified Communications

Published: May 30, 2017

Rebekah Carter - Writer

Rebekah Carter

One of the best-known mobile communication groups in the UK, and indeed around the world, Vodafone have seen some serious hits to their business and their confidence this month. The mobile giant has fallen drastically into the red with an annual loss estimated at around £5.2 billion after they took a significant hit to their Indian sector.

The Vodafone team recently confirmed that they have seen a £3.2 billion write-down for their Indian business, which has been struggling significantly in the recent months. The write-down announcement comes not so long after a deal was struck in March of this year to combine the Indian operation with the “Idea Cellular” group, in an attempt to deal with the price war that the country was currently facing.

Problems for the UK Branch

Vittorio Colao, CEO, Vodafone
Vittorio Colao, CEO, Vodafone

It’s not just the Indian business that’s suffering in Vodafone’s eyes either. The mobile company have also seen a huge plunge in their earnings within the UK. The latest revenue announcements revealed that the UK has been hit by seriously falling sales. Experts believe that some of the reasoning behind the current UK problems can be linked back to the impact of the falling pound value ever since the Brexit vote took effect.

Overall, the underlying earnings for Vodafone saw a boost of around 5.8% to 12 billion, excluding the issues with the Indian division, and the group are currently forecasting a stronger level of growth to their profit margins of around 8% during the remainder of the current financial year.

The group chief executive of Vodafone, Vittorio Colao, tried to reassure his investors by telling them that sales are still expected to see some significant growth, and cash flow is going to rise.

What’s Next for Vodafone?

Right now, it seems that the future for Vodafone appears a little rocky and uncertain, but the people behind the business are staying confident, and positive. Calao announced a rise of 2% to the dividend payout to all investors, which would be taking effect regardless of the hefty loss to their bottom line. He noted that the company expects to keep hold of its momentum for selling in the upcoming financial year, generating a greater cashflow equating to around 5 billion euros.

It seems that Vodafone are using their 2% dividend increase in an attempt to keep investors feeling confident in this uncertain time.

 

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