Vodacom Group recently disclosed a decline of 10.8% in their full-year earnings, a consequence felt from various factors, including the challenging beginnings in Ethiopia, heightened financial and energy costs, and the ever-looming spectre of inflation.
This conglomerate, predominantly under the wing of Britain’s Vodafone Group, embarked on the venture of Safaricom Ethiopia in partnership back in 2022, envisioning a prosperous trajectory following sustained investments spanning nearly half a decade. Vodacom, with a direct ownership stake of 5.7%, harboured expectations for this venture to invigorate growth prospects.
The primary telecom titan in South Africa, Vodacom, unveiled a drop in headline earnings per share (Heps) to $0.4 for the fiscal year ending March 31, compared to the preceding year’s $0.5.
CEO Shameel Joosub elucidated on the multifaceted challenges, citing adverse currency fluctuations across their operational landscapes, with recent devaluations affecting regions such as Egypt, thereby contributing to the decline in Heps figures.
Despite the teething costs tied to their Ethiopian operations, Safaricom’s stride in network expansion within Africa’s second most populous nation remains promising, as confirmed by Joosub.
On the revenue front, the group witnessed a notable 29.1% surge, amounting to $6.6 billion, bolstered by the strategic acquisition of Vodafone Egypt. Adjusting for a like-to-like comparison, the group’s service revenue growth stood commendably at 9.2%, aligning with their targeted medium-term trajectory.
Delving into operational metrics, the group’s earnings before interest, tax, depreciation, and amortisation saw a robust 24.3% uptick, landing at $3 billion, with Egypt’s contributions playing a pivotal role in this growth narrative.
Joosub affirmed the group’s unwavering commitment to capital expenditure, earmarking 13% to 14.5% of their overall revenue, pegged at $8.25 billion, despite prevailing economic headwinds.
Concluding on a shareholder-friendly note, the board approved a final dividend of $0.15 per share, underscoring their enduring financial stewardship amidst a dynamic and challenging business environment.