Wednesday 7 December 2016

Vodafone pays €400m dividend to sole shareholder as profits plunge

Published 18/01/2010 | 05:00

Vodafone's Irish operation paid a €400m dividend to its parent last year, bringing to €2.1bn the total it has returned since 2007, according to accounts for the business seen by the Irish Independent.

  • Go To

Vodafone Ireland paid the dividend in the financial year ended March 2009, having approved a €1.7bn share redemption in October 2007 to its sole shareholder, Vodafone Investments Luxembourg.

They are thought to be the first transfers made to the parent since Vodafone acquired Eircell in 2001.

The accounts also show that the country's largest mobile network operator, with around 2.1 million subscribers, recorded an almost 5pc decline in turnover to €1.19bn in its last financial year, while operating profit fell 24pc to €205.2m.

Pre-tax profits tumbled 33pc to €219.6m as the reduced cash balance, following the dividend repayment, slashed the interest it received from €50.7m to €13.4m. The company's own interest bill rose from just over €1m to nearly €3.4m.

Vodafone Ireland's revenue has declined as competition from rivals such as O2, Meteor and 3 forces the company to offer better deals to consumers, while its operating costs have also risen as it spends more in an attempt to acquire subscribers. Its sales and marketing spend climbed to €38.3m last year from €31m, while operational expenses rose to €239m from €231.2m.

Results

In the last quarterly results published by Vodafone, it said that blended monthly average revenue per user (ARPU) at the Irish arm fell 8.7pc to €38.80 in the three months to the end of September compared to the same period the previous year.

The number of texts sent in that quarter, by Vodafone Ireland customers, rose over 21pc to 1.16bn but total voice minutes used fell 1.8pc to 1.59bn.

The latest set of accounts note that blended ARPU fell 6.8pc to €492 in the 12 months to the end of last March, although the number of texts sent rose 18.4pc in the period and call minutes used were nearly 8pc higher.

Vodafone Ireland employs about 1,300 people and, within the past year, has let go around 100 staff as part of cost-cutting measures. A spike in its wages and salaries bill to €99.4m last year from €76.5m is thought at least in part to reflect redundancy payments made during the period.

Directors at Vodafone Ireland, including the chief executive of the operation, Charles Butterworth, were paid a combined total of €1.66m in the last financial year, down 32pc on the nearly €2.5m paid in the previous period.

Vodafone Ireland also owns the fixed-line business Perlico, which it acquired in 2007.

Additionally, Vodafone operates its own branded fixed-line service, and last year signed a deal with British Telecom's Irish arm that saw the mobile operator take control of BT's 87,000 residential and small business customers.

Vodafone Ireland had a total subscriber base of 2.29 million at the end of last September.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business