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| Vodafone writes down value of Italy and Spain units | Vodafone writes down value of Italy and Spain units |
| (about 1 hour later) | |
| Vodafone has written down the value of its units in Spain and Italy by £5.9bn which the firm has blamed on the tough market conditions in the two countries. | Vodafone has written down the value of its units in Spain and Italy by £5.9bn which the firm has blamed on the tough market conditions in the two countries. |
| The news came as the mobile phone firm reported a pre-tax loss of £492m for the six months to 30 September, against an £8bn profit a year earlier. | The news came as the mobile phone firm reported a pre-tax loss of £492m for the six months to 30 September, against an £8bn profit a year earlier. |
| But there was better news from Verizon Wireless, a US business of which Vodafone owns 45%. | But there was better news from Verizon Wireless, a US business of which Vodafone owns 45%. |
| It said on Monday that it would pay an $8.5bn (£5.4bn) dividend. | |
| The dividend is due to be paid to its owners - Verizon Communications and Vodafone - by the end of the year. | The dividend is due to be paid to its owners - Verizon Communications and Vodafone - by the end of the year. |
| It is the second dividend that Verizon Wireless has paid this year, following a $10bn one in January. | It is the second dividend that Verizon Wireless has paid this year, following a $10bn one in January. |
| For several years before that, Verizon Wireless had been using its spare cash to pay off debt instead of paying dividends. | For several years before that, Verizon Wireless had been using its spare cash to pay off debt instead of paying dividends. |
| Vodafone said it expected to receive £2.4bn of the Verizon dividend and plans to use part of it to start a £1.5bn share buyback programme. | |
| Under such a programme, a company buys its own shares and cancels them, which increases the value of the existing shares. | |
| Announcing its latest results, Vodafone chief executive Vittorio Colao said: "Our results reflect tougher market conditions, mainly in southern Europe." | |
| But he added that he was positive about longer term opportunities, partly as a result of the group's "attractive and growing exposure to emerging markets", such as India and Turkey. | |
| "The wider market has held concerns over southern Europe for some time now, and these numbers from Vodafone are uncomfortable proof that the financial fears are well-founded," said Richard Hunter from Hargreaves Lansdown stockbrokers. | |
| "News of the impairment in Spain and Italy is very disappointing, whilst organic revenue overall has fallen and net debt has risen." | |
| Revenue in southern Europe fell 17.5%, including an 8.2% decline due to the euro weakening against the pound. | |
| Vodafone said the pressure from price competition and continuing economic problems in the eurozone had been partially offset by improved revenue from data services, as more people had smartphones. | |
| It said customers in Italy and Spain had been reducing their spending on mobile phone tariffs because of economic weakness in those countries. |