Vodafone net profit drops 35%

British mobile phone company Vodafone said on Tuesday that its net profit had slumped 35 percent in the first half of its financial year as it booked a hefty loss on the value of its Turkish business. The share price of Vodafone jumped 6.93 percent to 115.8 percent on London's FTSE 100 index, which was down 1.62 percent in late morning trade.

Vodafone said in an earnings statement that profit after tax slid to 2.14 billion pounds (2.63 billion euros, 3.35 billion dollars) in the six months to September 30 compared with the first half of 2007/08. The company booked a loss of 1.7 billion pounds on the value of Vodafone Turkey.

"Our turnaround in Turkey is taking longer than we anticipated," Vodafone's new chief executive Vittorio Colao said in the company's earnings statement. Group revenue rose 17 percent to 19.90 billion pounds in the six months to September 30 compared with the first half of 2007/08, thanks to benefits derived from currency exchange rates.

"The first half results reflect a solid overall performance in a challenging operating and a weaker macro economic environment," said Colao, who in July replaced Arun Sarin, who stepped down after five years as Vodafone chief executive.

"Operating conditions are expected to continue to be challenging in Europe given ongoing competitive and regulatory pressures and recent deterioration of economic conditions in certain markets," Colao added.
In recent years, Vodafone has expanded into emerging markets across Africa and Asia, as it looks to offset flagging sales and fierce competition in maturing Western markets.