Reseller News

Vodafone NZ restates 2017 financial statements amid lower profits in 2018

Tech giant reports increased sales but lower profits in 2018 after restatements
  • Rob O'Neill (New Zealand Reseller News)
  • 04 September, 2018 10:45
Restatements and adjustments to 2017 accounts cloud Vodafone's year-on-year performance

Restatements and adjustments to 2017 accounts cloud Vodafone's year-on-year performance

Vodafone New Zealand made extensive restatements to its financial report for the 2017 year, with some errors going back to the acquisition of TelstraClear in 2013.

The telecommunications giant also reported relatively flat year-on-year revenue growth and a reduced profit in the year to 31 March 2018.

Meanwhile, 2017 revenues were restated down $29.8 million but profits went up $7.4 million.

The reasons for the restatements variously included changed timing of revenue recognition, the impact of deferred tax on goodwill recorded in relation to the 2013 acquisition of TelstraClear, and a the treatment of a contingent payment to the former owners of acquired ISP WorldxChange among others.

PwC, Vodafone's auditor, drew attention to the changes in its report, saying they were made as a result of a re-audit of the 2017 year "in anticipation of potential capital structure opportunities" to a lower level of materiality.

A proposed merger between Vodafone and Sky TV was vetoed by the Commerce Commission last February, after which Vodafone floated the idea of a public listing.

The auditor said the changes did not affect its opinion that the accounts posted in 2018 presented the financial position of the group fairly.

In addition, 2018 revenue was up slightly from $2.2 billion to $2.3 billion while operating profit fell from $106.9 million to $92.4 million - profit after tax was $39.9 million down from $47.6 million.

The release follows news that Meridian Energy has selected Vodafone as its preferred supplier of telecommunications services.

As reported by Reseller News, NZX-listed Meridian selected the telecommunications giant to provide full support services including data, voice and mobility after a fourteen-month bidding process that started last May.

The result is a four-year deal worth up to $16 million, with potential for extension.