Vodafone surged back into profit in its first-half, the British mobile phone giant said Tuesday and pledged to invest more in Europe and emerging markets after its US exit.
A file picture taken on May 22, 2012, shows a sign on a Vodafone store in central London
Profit after tax stood at pound sterling17.95 billion ($28.6 billion, 21.4 billion euros) in the six months to the end of September, boosted by a tax credit of almost pound sterling15 billion, it said in a results statement.
Vodafone had suffered a net loss of pound sterling1.98 billion in the same part of the previous fiscal year, when it was hit by impairment charges in troubled eurozone nations Spain and Italy.
And this time around after stripping out the huge tax gain, operating profit sank 8.3 percent to pound sterling5.71 billion with Vodafone saying that it continued to face "challenging" and "tough" trade in Europe.
Revenues rose 1.2 percent to pound sterling22 billion in the first half, as emerging markets continued to deliver growth.
Vodafone meanwhile vowed to invest pound sterling19.0 billion -- which was pound sterling1.0 billion more than previously stated -- to improve network quality and speed in key European and emerging markets by March 2016.
The world's second-largest mobile operator by subscribers after China Mobile had in September agreed to sell its US joint-venture stake to partner Verizon for $130 billion (97 billion euros), clinching one of the biggest transactions in global corporate history.
Vodafone on Tuesday said it would invest a total of pound sterling19 billion over the next two years on networks and services by March 2016.
"The two years ahead will see the largest and fastest period of network investment in our 25-year history," said Vodafone chief executive Vittorio Colao.
Vodafone, which is returning $84 billion to shareholders from the Verizon deal, added Tuesday that it was hiking its interim shareholder dividend by eight percent to 3.53 pence a share.
"The pending $130-billion US transaction will reward our shareholders for their long-term support of our strategy and will provide us with a strong balance sheet, improved dividend cover and the financial and strategic flexibility to make further investments in the business or returns to shareholders in the future," Colao said on Tuesday.
Vodafone meanwhile recently completed a 7.7-billion-euro ($10-billion) takeover of Kabel Deutschland -- the largest cable operator in Germany -- as it sought to grow in Europe.
Share price jumps on upbeat results
In afternoon deals, Vodafone's share price jumped 1.14 percent to stand at 229.95 pence on London's FTSE 100 index, which was down 0.19 percent at 6,715.46 points.
Vodafone shares have in recent weeks rallied on market speculation regarding a potential takeover bid from US telecoms giant AT&T.
However, Colao declined to comment on the matter when asked by reporters on Tuesday.
"Regarding AT&T, any question is for them, not for us," he told a conference call.
He added: "Whilst trading conditions in Europe remain very tough at present, we are encouraged by the forecast return to economic growth over the next two years and the potential for a shift in regulatory focus to support greater industry investment and consolidation.
"We have continued to make good progress in delivering our long-term strategy. Our emerging markets businesses are performing very well, driven by rapidly increasing smartphone penetration and data usage.
"In mature markets, our performance reflects more challenging conditions, which we continue to mitigate through ongoing actions to improve our operating model and cost efficiency," the Italian said.
- Dow Jones Newswires contributed to this report -