Africa's biggest wireless carrier Vodacom's earnings surge

Acquisition of a stake in Kenya’s Safaricom weighed on earnings but the one-time effect has been absorbed

This April 6, 2018 photo shows downtown Johannesburg, South Africa. Some of Johannesburg’s decaying blocks have been turned into upscale venues with art galleries and coffee shops, the first steps to restoring vibrancy to the city’s downtown that many fled in the waning years of apartheid, or white minority rule, which ended in the early 1990s. (AP Photo/Bram Janssen)
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Vodacom Group increased full-year sales and customer numbers after Africa’s biggest wireless carrier by market value expanded its network and sold more smartphones.

Sales rose 6.3 per cent to 86.4 billion South African rand (Dh25.7bn) and the number of subscribers in markets including South Africa, Tanzania and the Democratic Republic of Congo passed 100 million, the Johannesburg company said on Monday. The acquisition of a stake in Kenya’s Safaricom weighed on earnings but the one-time effect has been absorbed, chief financial officer Till Streichert said.

Vodacom announced the purchase of a 35 per cent stake in Nairobi-based Safaricom from its parent Vodafone a year ago to expand its sub-Saharan African operations and mobile-money offering, which is popular in countries with limited access to banks. Telecommunications companies see Africa as a high-growth market for data sales as technology becomes more accessible and less expensive.

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The shares rose as much as 1.3 per cent before trading 1 per cent lower at 155.37 rand as of 9.29am in Johannesburg. The stock is up 6.6 per cent this year, while crosstown rival MTN Group is down 8.4 per cent.

Headline earnings per share were flat at 9.23 rand for the year through March, compared with an average analyst estimate of 9.27 rand. Vodacom lowered the full-year dividend to 8.15 rand a share from 8.30 rand.

Vodacom has retained market leadership in all its territories, said chief executive Shameel Joosub . Looking ahead, he sees “renewed economic and political stability in South Africa” after President Cyril Ramaphosa ousted Jacob Zuma in February.

Vodacom invested 11.6bn rand to expand its African network, mostly in South Africa, and maintained targets such as mid-single digit service revenue growth.