Vodafone loses £5.2bn amid sales and writedown woe
Mobile phone giant Vodafone has slumped into the red with annual losses of £5.2bn after taking a mammoth hit on its Indian arm.
The group confirmed a £3.2bn writedown on its under-pressure Indian business after striking a deal in March to merge the operation with Idea Cellular to help tackle a raging price war in the country.
Vodafone also suffered a 15.8% plunge in underlying UK earnings as it was hit by falling sales and the impact of the pound's plunge since the Brexit vote.
Overall underlying earnings lifted 5.8% to £12bn, excluding the Indian division, and the group forecast stronger profit growth of up to 8% over the current financial year.
Vodafone chief executive Vittorio Colao cheered the group's "confidence in the outlook" as he announced a 2% rise in the dividend payout to investors despite the hefty bottom line loss.
The Indian writedown comes after the company suffered from the emergence of a new competitor in the once lucrative market, with new network Jio blowing rivals out the market by offering free calls and data until April 1.
Vodafone's deal with Idea Cellular will see it own a 45% stake in the new entity, which will give it greater might in the Indian market and deliver cost savings of around £8bn.
But the group is also suffering amid stiff competition in its domestic UK market, where service revenues fell 17%, or 3.3% with the impact of the weaker pound stripped out.
UK earnings plunged 31% to £1bn including the exchange rate hit from the pound, or 15.8% lower excluding currency changes.
But the firm said there was "good momentum" in UK broadband, with 33,000 customers added in the final three months of its year to March 31.