For the year ending March 31, Vodafone made a profit of 10.75bn pounds ($19.49bn) before goodwill amortization and exceptional items, up 17% from 9.18bn pounds ($16.64bn).

However, the net loss for the year was 9.01bn pounds ($16.34bn), down from a net loss of 9.82bn pounds ($17.80bn). The net loss reflected a charge of 15.20bn pounds ($27.51bn) for goodwill amortization.

Over the course of the year, the operator saw organic growth of 10%, which resulted in revenue of 33.56bn pounds ($60.79bn), up from 30.37bn pounds ($55.02bn) the previous fiscal year.

During the course of the year, the Vodafone’s global customer base continued to expand. It added 13.7 million new mobile customers, taking its global customer base to 133.4 million.

Vodafone’s traditional expansion policy has been to acquire a minority stake in a foreign operator, and then expand its share until it achieves a controlling interest. In two of its biggest markets, Italy and the UK, ARPU increased 4% and 6% respectively. In Germany however, ARPU declined 1%.

But it is in Japan, a country that contributed a quarter of Vodafone’s group revenues, that is causing some concern. Vodafone KK used to be known as J-Phone until Vodafone rebranded the subsidiary under its own name.

The unit reported a net loss of JPY 100bn ($890m) for the year, compared to a net profit of JPY 79.5bn ($708m). ARPU was also 7% lower, as the unit struggled to compete against its larger rivals, NTT DoCoMo Inc and KDDI Corp.

Vodafone KK is currently the third ranked mobile operator in Japan, and has been losing ground to rival KDDI with its 3G offerings, and the increasing price competition in the Japanese market. The situation looks likely to get worse when market leader DoCoMo catches up in the next couple of months with its range of 3G handsets.

In order to stem the erosion in this vital market, Vodafone has announced plans to purchase the remaining third of the subsidiary for 2.6bn pounds ($4.71bn). Vodafone’s chief executive Arun Sarin said the offer shows the company is determined to maintain and build a strong Japanese company.

Vodafone is hoping that it reap the benefits from its own range of 3G handsets when they appear later this year following the launch of Vodafone Live!

Meanwhile, Vodafone also announced that it would undertaking a 3bn pound ($5.43bn) share buyback program. This is on top of 1.1bn pounds ($1.99bn) it has already spent on share buyback programs since November 2003.

The operator has been under pressure to release the amount of cash it returns to shareholders since pulling out of a $41bn bid for US operator AT&T Wireless earlier this year.

Looking forward to the coming year, Vodafone said it expects high single-digit mobile customer growth, with free cash flow expected to be about 7bn pounds ($12.67bn).