Vodafone 1998 Annual Report Download - page 54

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Vodafone Report and Accounts - Financial Review
primarily arose as a result of the strength of sterling against the Greek
drachma. The largest contribution to the advance in total operating profit was
achieved in Continental Europe, which improved by £106.4m as Panafon
continued to trade strongly and its results were fully consolidated for a full
twelve months. Net losses in the Pacific Rim increased by £20.2m to £59.2m,
primarily due to the Australian businesses. However, the network company
went through break-even in January 1998 and the Australian businesses as a
whole should achieve overall profitability in 1998/99. Profits increased in the
Rest of the World to £43.7m as the South African businesses continued to
perform strongly.
Profit on disposal of fixed assets
The profit on disposal of fixed asset investments arose from a part disposal of
the Group's interest in Globalstar, the disposal of the Group's 35% stake in
Pacific Link and the disposal of the Group's 16% interest in the UK service
provider, Cellphones Direct.
Interest
The Group's net interest cost increased by £35.4m as borrowings increased
by £436.4m to finance international acquisitions.
Taxation
The effective tax rate fell by 0.6% to 31.3% as a result of the beneficial impact
of the reduction in the UK corporation tax rate from 33% to 31% offset by
higher tax overseas, particularly in Greece where brought forward losses
have now been fully utilised and the corporation tax rate increased by 5% to
40%. Excluding the effect of disposals, the effective tax rate fell from 33.5% to
32.5%.
Minority interests
The increase in the minority interests in profit on ordinary activities after
taxation is primarily due to the impact of the inclusion of the 55% owned
Greek subsidiary, Panafon, for a full twelve months.
http://www.vodafone.com/download/investor/reports/annual98/financialreview/profitandloss.html (2 of 2)29/03/2007 23:08:54