Fin24

Vodacom ups profit on higher capex

2012-05-21 08:52

Johannesburg - Vodacom Group [JSE:VOD] posted a modest 8% rise in full-year earnings on Monday, coming just short of expectations after a hefty tax bill and high capital expenditure costs.

The South African unit of Britain’s Vodafone said diluted headline earnings per share totalled 706 cents in the year to end-March, up from 654.3c a year earlier.

The company said in a trading statement last month it expected earnings to be 5% - 10% higher, while a poll of 17 analysts by Thomson Reuters predicted a 10% rise.

The total dividend, however, jumped over 50% to 710c. Analysts had expected 585 cents, according to the Reuters poll.

Data revenue increased 23.6% to R7.6bn.

Mobile operators across Africa have been rolling out data networks and pushing smartphones aiming to cut back reliance on voice revenue as their main earnings source.

Vodacom operates in South Africa, the Democratic Republic of Congo and Tanzania, where it is fighting to defend market share from larger competitors MTN Group [JSE:MTN] and India’s Bharti Airtel.

It is currently embroiled in an ownership dispute with its local partner in the Democratic Republic of Congo, Congolese Wireless Network. A court has also ordered Vodacom to pay a former consultant $21m in fees.

Vodacom will not let its Congolese asset go, and is appealing a court ruling of a public sale on June 3, chief executive Pieter Uys said.

“The bottom line is that we will not let that asset go, we will not get to a situation on the 3rd of June where the asset is just sold,” Uys said on a conference call with reporters.

Shares of Vodacom are up 12% this year, outperforming a 2.6% rise in Johannesburg’s Top 40 - (Tradeable) [JSE:J200] index of blue chips.

Vodacom shares rose 2% to R101.98 on Monday morning.