Vodacom Group on Monday disclosed a 10.8% decline in full-year earnings, citing setbacks from Ethiopia start-up losses, increased finance and energy expenses, and inflationary forces.
The company, majority-owned by Britain’s Vodafone Group, said headline earnings per share (HEPS) dropped to R8.46 in the year ended 31 March, versus R9.48 a year earlier.
In 2022, Vodacom co-launched Safaricom Ethiopia in partnership with a consortium, banking on the potential growth of the populous nation. Vodacom holds a direct 5.7% stake in the venture.
“A combination of start-up losses in Ethiopia, higher finance and energy costs, the impact of absorbing inflationary pressures, and weaker exchange rates across markets, including the recent devaluation of the Egyptian pound, contributed to the 10.8% decline in headline earnings of 846 cents per share (cps),” said Shameel Joosub, Vodacom Group CEO.
“Reflective of our dividend policy of paying at least 75% of headline earnings, the Board declared a dividend per share of 590cps for the year. Nonetheless, we expect that our efforts to diversify the Group’s footprint and product mix will unlock strong returns over the medium term.”
Vodacom Group revenue rose 26.4% to R151 billion was up 26.4%, positively impacted by the acquisition of Egypt.
“In a year when we celebrate our 30th anniversary, we also surpassed the 200 million customer mark. These are two particularly gratifying milestones in Vodacom’s history,” said Joosub.
Group earnings before interest, tax, depreciation and amortisation grew 24.3% to R56.1-billion and by 7.8% on a pro forma basis, with Egypt being a key driver of the growth.
From an infrastructure investment perspective, Vodacom spent R11.1 billion to support network resilience, leverage our new spectrum assets and enhance our IT platforms to maintain our competitive edge and remain South Africa’s most reliable network.
“Our proposed purchase of a joint venture stake in South African fibre company Maziv will enable affordable access to connectivity in some of the most vulnerable parts of the country through an ambitious fibre roll-out programme, assisting in narrowing the country’s digital divide,” said Joosbub.
“The transaction is subject to a review by the Competition Tribunal with hearings due to commence on 20 May 2024, during which Vodacom will showcase the strong public interest and pro-competitive advantages that the transaction would have on the fibre market, and the country as a whole.”
