Vodafone losses swell to $9.7b due to difficulties in Germany, Italy

Vodafone Group, the world's largest mobile phone company, reported a net loss of 5.1 billion pounds ($9.7 billion) in the first half of its financial year, largely because of difficulties in its German and Italian operations, an Associated Press report said.

The report said the loss contrasted with a net profit of 2.77 billion pounds ($5.1 billion) in the six months ending September 30, 2005.

Revenue for the period was 15.6 billion pounds ($29.8 billion), up 6.9% compared with the previous year, the report added.

The results included an impairment charge of 8.1 billion pounds ($15.5 billion) related to the carrying value of goodwill in operations in Germany and Italy, reflecting increased competition in both markets and regulatory pressures in Germany, the company was quoted by Associated Press as saying.

CEO Arun Sarin was upbeat about the company's prospects.

'These results show that Vodafone is on track to deliver on its key targets for the current financial year,' he said.

The CEO was also quoted as saying that 'competitive and regulatory pressures in the European region have been offset by strong performances in our developing markets and the US.'

The company reported adjusted operating profit of 1 billion pounds ($1.9 billion) in the US during the period, up 31.5% compared with the previous first half, the report said.

Vodafone, which has been withdrawing from less profitable markets, sold its Japanese and Swedish businesses for around $15.8 billion this year. It has said it would look at selling its Swiss operations, the report further added.