Vodafone Shares Slump After £6bn Eurozone Writedown

Vodafone became the latest global firm to take a hit from the Eurozone debt crisis after it wrote down the value of its businesses in Italy and Spain by nearly £6bn amid slumping revenues.

Europe's biggest wireless group said revenues for the first-half of the year fell 1.4 percent from the same period last year to around £21.8bn while operating profits rose marginally to around £6.2bn. The company also lowered its full-year earnings outlook. The massive write-down on its European operations, where Vodafone generates nearly two-thirds of its revenues, totalled around £5.9bn

"We have continued to make progress on our strategic priorities over the last six months, with good growth in data and emerging markets in particular," said Chief Executive Vittorio Colao. "In the short-term, however, our results reflect tougher market conditions, mainly in Southern Europe."

Vodafone shares fell around 3 percent in the opening minutes of trading in London to change hands at 162.3 pence each. The stock is down around 6.5 percent so far this year.

Vodafone lifted its half-year dividend by 7.2 percent to 3.27 pence per share and said it planned to buy back around £1.5bn worth of stocks in a share buy-back programme. Its US venture, Verizon Wireless, is likely to return a £2.4bn by the end of the year, the company said.

Colao told Bloomberg news Monday that the company was searching for media partnerships in order to grow its European customer base as revenues continued to slip in mature markets where mobile phone penetration rates appeared to have peaked.