Vodafone slumps into loss of £1.977 billion on Spain, Italy woes

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British mobile phone giant Vodafone on Tuesday revealed it had slumped into a net loss of £1.977 billion during its first half on massive writedowns linked to indebted eurozone countries Spain and Italy.

Vodafone's loss after tax for the six months to September 30, equivalent to $3.138 billion or 2.473 billion euros, came as the company said it suffered impairments of £5.9 billion linked to financial turmoil in Spain and Italy.

The net loss compared with profit after tax of £6.679 billion in the first half of Vodafone's 2011-12 financial year, the company said in its earnings statement.

Chief executive Vittorio Colao said the latest results "reflect tougher market conditions, mainly in southern Europe" which would continue to impact the company in the short term.

However he voiced optimism about the longer term owing to Vodafone's growth in emerging markets such as India and Turkey.

Vodafone took a hit of £3.2 billion linked to its operations in Spain and an impairment charge of £2.7 billion for Italy during its first half.

The company added that it would carry out a share buyback totalling £1.5 billion on receipt by the end of 2012 of a £2.4-billion dividend from US company Verizon Wireless, in which Vodafone has a 45-percent stake.

"We have continued to make progress on our strategic priorities over the last six months, with good growth in data and emerging markets in particular," Colao said.

"We remain very positive about the longer-term opportunities."

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