Vodafone profits fall 11 per cent as taxes bite

TELECOMS OPERATOR Vodafone has announced that its 2012 fiscal year profits fell by 11 per cent to just over £7bn.

Vodafone reported revenues of £46.4bn, up just over one per cent from the previous year. However the firm's profits fell by 11 per cent to £7bn as increased financing costs and income taxes bit into the bottom line.

Earlier this year Vodafone announced that it will buy Cable & Wireless for £1bn, while its considerable stake in US mobile operator Verizon Wireless accounted for almost half of its profits.

Vittorio Colao, Vodafone Group CEO said, "Our goal over the next three years is to continue to strengthen our technology and commercial platforms through reliable and secure high speed data networks, significantly enhanced customer service across all channels, and improved data pricing models, to enrich customers' experience and maximise our share of value in the markets in which we operate."

Although Vodafone's tax bill has increased, the firm still managed to dodge an £8bn liability, with the company having to pay only £1.25bn in taxes. The fact that Vodafone has over £7.1bn in cash according to its latest accounts suggests that it could easily have paid HM Revenue and Customs, but instead it fought for years against the taxman to safeguard its balance sheet.

Vodafone said it expects its operating profit to grow during its 2013 financial year, with Verizon Wireless' increase in profits offsetting against a weakening Euro. µ