Vodacom earnings fall 6.6% on black share scheme

In Summary

• Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

• Vodacom, which is majority owned by Vodafone, concluded a broad-based black economic empowerment (BEE) ownership deal in September.

Vodacom
Vodacom
Image: FILE

South Africa’s mobile phone operator Vodacom reported a 6.6% drop in full-year earnings due to one-off costs related to a share scheme offered to black investors.

Headline earnings per share (EPS) for the full-year ended March fell to 862 cents from 923 cents a year earlier.

Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

Vodacom, which is majority owned by Vodafone, concluded a broad-based black economic empowerment (BEE) ownership deal in September, which saw Vodacom issue additional shares.

Under black economic empowerment rules, South African companies are encouraged to meet quotas on black ownership, employment and procurement as part of a drive to reverse decades of exclusion under apartheid.

It also updated its medium-term capital expenditure target to reflect the IFRS 15 accounting standard and also changed its profitability target to operating profit from earnings before interest and taxes to include the benefits of the Kenyan Safaricom acquisition.

Medium-term group capex is now expected to be in the range of 13%-14.5% from 12%-14%, while the operating profit target is expected to be in the mid-high single digit growth rate.

Vodacom, which competes with MTN group and Telkom , said group service revenue jumped 5 percent, led by a strong performance overseas.