South Africa’s Vodacom Group witnessed a 1.1 percent rise in half-year earnings, while net profit increased 7 percent which was boosted by the acquisition of Safaricom, with headline earnings per share coming in at 445 cents in the six-months ended September, compared with 440 cents a year earlier.
The leading pan-African corporate connectivity and telecommunications provider, declared an interim dividend per share of 390 cents, slightly changed from the previous year.
Vodacom is the leading cellular network in South Africa with an estimated market share of 58% and more than 23 million customers. However, interim results for the six months ended 30 September 2017 revealed 2.9 million South Africans and 1.4 million international customers joined its network in the first half of this year, which brings the total customers number to 71 million.
Additionally, group revenue grew at 4.6 percent to R41.9 billion, service revenue increased 4.7% to R26.7 billion, group service revenue grew 2.0% to R34.7 billion; normalized growth, excluding currency translation effects, was 4.6% and South Africa revenue growth accelerated to 7.7% boosted by stronger device sales.
After Africa’s biggest wireless operator by market value reduced its first-half dividend amid weaker economic conditions in some of its key markets, Vodacom Group shares fell the most in more than a month.
Peter Takaendesa, an analyst at Mergence Investment managers in Cape Town said he expected earnings to rise 6 percent to 7 percent in the first half, noting that operational performance was weaker than expected and that in turn impacted the dividend.
Since October, its Stock slumped as much as 4.6%, the most, trading 3.2% lower at R147.50 as of 10:29am Monday in Johannesburg; compared with a 0.6% gain on the FTSE/JSE Africa Top40 Index.
Shareholders are to receive an interim dividend of 3.90 rand a share, compared with 3.95 rand a share a year ago, the Johannesburg-based company said in a statement.