The Vodafone badge is deep red and Vodafone’s Japan arm is heamorraging yen; but, somewhat ironically, the flow isn’t quite as bad as the company thought. Today Vodafone Holdings K.K. announced it had lost 100 billion yen ($887 million!) in the financial year to 31 March 2004 compared to a proft of 79.5 billion yen in 2003 (when the company was still J-Phone). CEO Darryl Green had expected a loss of 114 billion yen, which would have been a super uncool $1 billion bucks at this week’s exchange rates, so it wasn’t quite as big a bloodbath as expected. Vodafone experienced revenue growth of 3.3%, but the company suffered operating, ordinary, and net income deficiencies due to increases in 3G depreciation costs, handset inventory provision, and retention initiatives. The skinny: operating revenues were down 7.9%, 0.3% worse than forecast at 1,665 billion yen against 1,797 billion yen last year. Within this, Vodafone K.K.’s operating revenues were 1,509 billion yen, up 3.3% compared to last year. Operating income plunged 32.9% to 185 billion yen from 275 billion yen last year.
Apart from poor subscriber pickup of Vodafone’s phones, Green pointed to a whole series of sluggish metrics.
Lower cash flow was blamed on taxes of 161 billion yen compared to 40 billion yen the year before, and a 181-billion-yen chunk taken from the leveraged disposal of Japan Telecom.
Cash flow from operations plunged to 262 billion yen from 496 billion last year.
Cash flow from investment switched to negative 44.8 billion yen from minus 341 billion yen last year. Cash flow from financing went to negative 223 billion from 162 billion yen last year.
EBITDA, used by analysts to give an encouraging hand to companies drowning in debt or other financial problems, plunged 15.5% to 460 billion yen from 544 billion yen last year.
As for debts, at least Vodafone managed to reduce them. The company’s interest bearing debt fell by 245.8 billion yen in 2003, achieved largely through unloading Japan Telecom.
Vodafone’s summary [.pdf] of its financial results Here
Vodafone’s presentation [.pdf] Here.
— WWJ Editors