Vodafone Group swings to $6.7b loss on India

Vodafone Group has swung to a €6.1 billion ($6.76 billion) full-year loss as a result of a €3.7 billion writedown on its Indian operations.

Vodafone India recorded an impairment of loss of €4.51 billion for the financial year as a result of the anticipated impact of the entry of Reliance Jio Infocomm into the market and the resulting intense price competition.

The Indian unit reported an operating loss for the financial year of €4.17 billion, compared to a 423 million operating profit a year earlier. Service revenue also fell 4.9%, or 0.7% on an organic basis, to €5.85 billion.

But after Vodafone India reached its agreement to merge with Idea Cellular to create India’s largest mobile operator, the impairment charge was reduced to €3.7 billion. Idea Cellular recently also posted a net loss for the financial year.

Vodafone India’s total net debt meanwhile grew to €8.7 billion by the end of the financial year, up from €8.1 billion at end-2016. Some €7 billion of this was spectrum-related debt

The impending merger has now led Vodafone to classify Vodafone India as part of its discontinued operations for reporting services.

The Vodafone Group’s total revenue meanwhile fell 4.4% to €47.63 billion, but operating profit grew 182.2% to €3.72 billion.