Shares in mobile phone giant Vodafone plunged 11% in London today after it reported a 9.5% drop in interim pre-tax profits and warned of a fall in revenue growth and profits margins next year.
Pre-tax profits at the company - which has thousands of Irish shareholders - fell to £4.1 billion in the six months to the end of September, compared with £4.5 billion in the same period of 2004.
The fall was the result mainly of a charge of £515m from the recent sale of its subsidiary Vodafone Sweden to Telenor, the Norwegian telecommunications operator. But earnings before interest, tax, depreciation and amortisation (EBITDA) rose to £6.7 billion from £6.3 billion last year.
Vodafone warned of a 'small decline' in mobile profit margins in the financial year ending in March 2007, blaming 'progressively higher levels of mobile penetration' in its core European markets. It also said organic revenue growth would also be slightly lower next year than in the current financial year ending March 31 2006. In reaction, the share price plunged 9% to 132p in London this afternoon.
Vodafone's revenue climbed by 9% to £18.25 billion in the first six months of the year. The group saw its customer base grow by 13% to 171 million people over the period. But Vodafone warned that profit margins at its Japanese arm dropped by six points, with a similar fall likely in the second half.
Vodafone Ireland said it added 32,000 customers in the three months to the end of September, bringing its total customer base to just over two million.
The company also said it had 93,800 third generation mobile customers. Average monthly revenue per user (ARPU) moved up to €53.10 from €51.40 at the end of June. This compared with £24.90 in its British operations, €24.40 in Germany and €30 in Italy. Vodafone Ireland also announced the launch a range of business e-mail services.
Vodafone shares closed 11% lower at 129.25 pence in London this evening - its steepest one day loss since 1998.
