Mobile phone giant Vodafone today indicated its run of multi-billion pound losses would end next year following a change in accounting rules.
The company once posted the largest loss in UK corporate history, but will no longer have to include substantial write-downs on assets that it acquired as part of its break-neck growth.
The rule changes mean Vodafone would have been able to report profits of £9.01bn (€13bn) for the financial year to March 2004, rather than a deficit of £5.34bn (€7.7bn).
Losses for the following six months totalled £2.2bn (€3.2bn) because of the amortisation of goodwill, instead of profits of £4.54bn (€6.6bn).
Companies currently have to remove from their balance sheet the difference between the price of any takeover deals and the value of the physical assets being acquired.
This has been particularly severe for Vodafone as its rapid global expansion saw it acquire Mannesmann, Eircell, Japan Telecom and the J-Phone Group in the space of a few years.
For the year ending March 2002, Vodafone set a new record for losses by a UK company when it announced a shortfall of £13.5bn (€19.5bn).
Analysts have largely ignored the bottom-line results and trained their eyes on the underlying performance of a business that has frequently beat expectations.
Vodafone financial director Ken Hydon today said the adoption of the International Financial Reporting Standards (IFRS) would allow the company to present its underlying business performance more clearly.
The company will stick with the current accounting rules for its results for the year to March 31, but will then use the IFRS methods.