Vodacom cautious on outlook

Johannesburg - South Africa's biggest wireless phone operator Vodacom reported lower first-half profit mainly due to a R3.2bn impairment charge after acquiring a satellite company.

Vodacom, majority owned by Britain's Vodafone, said on Monday headline earnings per share for the six months to end-September fell 12.4% to 219c, at the bottom-end of its forecasts range of 10%-20% increase.

The company said headline earnings were hit by impairment losses relating to its acquisition of pan-African satellite interconnection services firm Gateway, where trading was poor due price competition and tough economic conditions.

Vodacom said profit was also hit by the reversal of a deferred taxation asset of R551m due to the reduced profitability of its business in the Democratic Republic of Congo (DRC).

The company, which debuted on the Johannesburg stock exchange in May after a deal with Vodafone, said mobile users grew 16.5% to 41.6 million.

Vodacom warned that it was too soon to expect a recovery.

"It is too soon to be confident in a sustained recovery across all customer segments," Vodacom said in a statement.

- Reuters