![[South Africa] Vodacom half year earnings flat as tax adjustment takes toll](Vodacom-office.jpg)
[South Africa] Vodacom half year earnings flat as tax adjustment takes toll
Leading South African telecom Vodacom Group has reported flat earnings for the 2016 half year in what it has attributed to currency effects and a one off tax adjustment.
According to the telco, headline earnings per share, which strips out certain one-off items and is the main profit measure in South Africa - was unchanged year on year at 440 cents for the six months to September 30.
“The overall strong operational performance for the six months was negatively impacted by a one-off adjustment in taxation for Tanzania as well as the impact from weaker local market foreign currency,” Vodacom said in a statement.
The group delivered service revenue growth of 5.3 percent, led by a 2.3 million increase in active customers since March 2016, mostly in South Africa.
Active international customers decreased 11 percent to 27.9 million as authorities in markets that include Tanzania made changes to the way Vodacom registers subscribers.
“As expected, our international operations have been impacted by customer registration requirements,” CEO Shameel Joosub said in a conference call, referring to the Tanzania telecoms regulator's disconnection of 600 000 phones from mobile networks lats June in an effort to stamp out counterfeit devices.
“However, the monthly customer acquisitions trend has improved, with net customers additions turning positive and recovering during the second quarter.”
Shares in Vodacom rose by almost 1 percent to $10 by 0704 GMT. Group data revenue was up 18.7 percent, supported by strong network investment, the company said.
The South African unit of Britain's Vodafone has spent $2.58 billion over the past three years to expand its network, with a strong focus on providing faster Internet services as increasing numbers of consumers use smartphones.
In the first half of the year, the group invested $4 billion. Vodacom is targeting group capital expenditure of 12-14 percent of group revenue in the medium term.
Vodacom declared an interim dividend per share of 395 cents, the same as last year.
