Vodafone is taking a cautious approach to future expansion, despite a massive 180% spike in net profit in the year to end-March.
CEO Vittorio Colao said the firm would assess new opportunities to grow the firm’s footprint in emerging markets on a case-by-case basis, while revealing net profit of £8.61 billion (€10 billion) in annual results published today.
Profits were up from £3.08 billion in 2009 on the back of an 8.4% rise in revenues to £44.4 billion – driven mostly by 8.9% growth in service revenues to £41.7 billion.
However, that growth came from Vodafone’s operations in Africa, Asia Pacific, and the Middle East, as the tough economic climate in Europe took its toll during the year.
“We remain cautious with respect to future footprint expansion,” Colao said, adding. “Our primary focus remains on driving results from our existing emerging markets.”
The firm was hit by a £2.3 billion charge on its Indian operation, due to tough competition in the market and the 3G spectrum auction.
Despite the problems in Europe, the region’s growing smartphone user base helped the telco to rake in over £4 billion in data revenues for the first time – a 19.3% increase on the £3.04 billion reported in 2009.
Fixed line revenues were up 7.9% at £3.3 billion.
Colao said Europe holds the key to the firm’s success in 2011, noting that his forecast of a return to organic revenue growth in the next 12 months is “dependent upon the strength of the economic environment and the level of unemployment,” in the region.
The CEO forecasts operating profit in the range of £11.2 to £12 billion for 2011.