South Africa’s Vodacom reports fall in half-year earnings

South Africa’s largest mobile operator Vodacom Group reported a 5.1% fall in half-year earnings on Monday and declared an interim dividend of 420 cents per share, up 1.2%.

Vodacom, majority-owned by Britain’s Vodafone, said headline earnings per share (HEPS), the main profit measure in South Africa, fell to 505 cents in the six months ended Sept.30, down from 532 cents a year earlier.

Vodacom said HEPS in the prior year benefited from the tax rate change in Kenya.

Group service revenue increased 5.4% to 38.9 billion rand ($2.54 billion), while operating profit increased 5.7% to 14.1 billion rand, both on a normalised basis.

The growth was supported by South Africa, which delivered service revenue growth of 3.6% driven by connectivity demand, an additional 1.1 million data customers, incremental wholesale revenue and growth in its new services such as digital financial.

Its international operations, which includes Tanzania, Kenya and Mozambique, delivered a strong recovery, with normalised service revenue growth of 9.0%, supported by a return to charging for M-Pesa transactions and strong data demand.

In line with government guidelines, mobile operators zero-rated or lowered some mobile money transaction fees to cushion customers from the effects of the COVID-19 pandemic.

In the current financial year, Vodacom will invest more than 10.5 billion rand into its network, it said, at a time when many of its customers continued to work, entertain and educate from home. Reuters