London, United Kingdom (4E) – British mobile phone company Vodafone on Tuesday reported that it suffered a net loss of £1.977bn in the first half of the fiscal year due to expensive writedowns in struggling euro zone markets Spain and Italy.
The company blamed the tough market conditions in the two major European markets for the £5.9bn worth of writedowns of its units there.
Vodafone’s Spanish operations took a £3.2bn beating while its Italian business incurred an impairment charge of £2.7bn in the first half.
Vodafone’s after-tax loss in the six months through September stood at 2.473bn euros ($3.138bn). The company recorded an after-tax profit of £6.679bn during the same period in the 2011-12 financial year, according to the company’s earnings statement.
On Monday, Vodafone announced that it would make a $8.5bn dividend payout at the end of the year to the company’s owners – Verizon Communications and Vodafone.
Vittorio Colao, the company’s chief executive, said that the company’s weak performance mirrors the difficult market conditions in southern European countries and expects it would continue to be a drag on the company’s earnings in the short term.
Despite the poor results, Colao stated that the company has made progress with its strategic priorities as it sees good growth in data and emerging markets over the last six months.