The sales outlook is strong, Vodafone says

In the year to end-March, the mobile giant lost £6.2bn ($10.2bn) after exceptional items such as revaluation of assets had been taken into consideration, compared with a loss of £13.6bn a year earlier.

On an operating basis, the firm made a profit of £8.4bn, up 36% year on year.

The discrepancy between the two earnings figures - some £14bn - mainly relates to a downward revaluation of the firm's assets, particularly expensive foreign acquisitions made during the booming 1990s.

Crucially, however, the firm did not further revise down its valuation of third-generation mobile licences, which have been the main cause of heavy losses at mobile operators in recent years.

Pay row rumbles on

Vodafone chief operating officer Julian Horn-Smith said the firm had conducted a review of its subsidiaries and found no need to write down their value.

Vodafone was "very unlikely" to write down the value of its third generation mobile licences once a new chief executive takes the helm in July, Mr Horn-Smith told BBC World Service Radio.

And he dismissed speculation that asset write-downs had been avoided to bolster departing chief executive Sir Christopher Gent's performance-based pay-off, saying the two issues were decided on separate criteria.

Mr Gent's pay attracted shareholders' fury in 2001, when Vodafone reported the biggest loss in UK corporate history while Mr Gent received £6m in salary and bonus payments.

Mr Horn-Smith said executive renumeration was judged on the firm's operating performance using "very strong and demanding" criteria, whereas any impairment review would be based on the value of the company's assets.

Ups and downs

Vodafone hailed its performance as "excellent", and forecast a 10% increase in revenue next year.

The markets were less enthusiastic, since the company's results came more or less within the range of analysts' forecasts.

Vodafone shares rose slightly as the markets opened, but eventually closed down 2.4% at 122.5p.

Most brokers had expected the firm to turn in robust results, despite heavy losses from rival MMO2 last week.

Spending up

The main cause for cheer, Vodafone said, was that the underlying fundamentals of the business were looking stronger.

Average revenue per user, a key measure for mobile firms, was up in almost all its main markets - to £292 at end-March in the UK, compared with £287 three months earlier.

In Germany, however, the figure was flat, and recession-hit Japan saw a slight fall.

The firm trumpeted a 73% jump in earnings from data services, an indication that its market is broadening beyond the relatively low-margin business of handling voice traffic.

In October, it launched Vodafone Live, a paid multimedia service which takes over from defunct online venture Vizzavi, and which aims to pave the way for its 3G services.

Since then, Vodafone has signed more than 1 million customers to the service.