Vodacom Group has reported a 19.4% decline in half-year earnings, hurt by start-up losses in Ethiopia and foreign currency depreciation.

Vodacom launched Safaricom Ethiopia last year with a consortium led by Kenya’s Safaricom, which is part-owned by the South African company and its parent, the UK’s Vodafone Group, betting that the populous nation will power growth after about five years of investment.

The group said in a statement that Safaricom’s profit was stunted by Ethiopian operations, which were “impacted by currency reforms in the period”. The business, however, reached a 6.1 million customer base, up 47.1% year over year, reflecting strong commercial momentum.

Decline in Heps
Headline earnings per share, a profit measure, fell to R3.53 in the six months ended on 30 September, from R4.38 a year earlier.

Group service revenue declined 1.2% to R58.6-billion due to currency headwinds, however, on a normalised basis it grew 9.9%. The board declared an interim dividend per share of R2.85, down 6.6% from R3.05 in the same period a year ago.

Source: TechCentral