MTN: 9,351 +108 (+1.17%)
South Africa's Vodacom cuts dividend payout after earnings miss
* Mobile phone operator cuts dividend payout
* Shares down 4 pct; Vodacom blames one-off factor
* Annual revenue up 8.1 pct at its South African operations
(Recasts, adds shares, details on South African ops and
smartphones sales, rival comparison)
By Justin George Varghese
May 14 (Reuters) - South African mobile phone operator
Vodacom Group disappointed investors with lower than
expected full-year earnings and a cut in its dividend payout on
The company, owned by Britain's Vodafone, blamed a
one-off hit from its purchase of a stake in Kenya's Safaricom
for the disappointing earnings, which missed analysts'
estimates and sent its shares down nearly 4 percent in
Vodacom acquired a 35 percent stake in Safaricom last year
as part of a move by its British parent to consolidate two of
its African interests.
On Monday it said its earnings for the year to March 31 were
weighed down by shares issued to acquire the Safaricom stake,
but the one-time effect had now been absorbed.
Headline earnings per share, the main profit measure in
South Africa that strips out certain one-off items, was 923
cents, unchanged from a year earlier and falling short of
analysts' estimate of 927 cents.
However, South Africa's biggest mobile phone operator said
full-year revenue rose 6.3 percent to 86.37 billion rand ($7
billion), as it added more customers and sold more smartphones
in its domestic market.
Its shares fell as much as 4.5 percent and were down 3.96
percent at 150.8 rand in late morning trade, the top loser on
Johannesburg's benchmark Top-40 Index, which was flat.
Vodacom, which has invested heavily in its network to
provide faster internet services as increasing numbers of
consumers use smartphones, said it added 7 million customers,
including 4.5 million in South Africa, in the year.
It now has more than 103 million customers, including
Safaricom's 1.4 million users.
Vodacom said revenue rose 8.1 percent at its South African
operations to 70 billion rand, boosted by strong device sales,
with equipment sales up 15 percent.
It announced a final dividend of 425 cents per share, down
from 435 cents last year. For the whole year, total payouts
amounted to 815 cents per share, compared with 830 cents in the
MTN Group, Vodacom's nearest rival, cut its 2018
dividend by about 30 percent in March, but adopted a
"progressive" dividend policy, saying it would use this year's
figure as a base to increase payouts by 10 to 20 percent in the
next three to five years.
($1 = 12.2648 rand)
(Reporting By Justin George Varghese in Bengaluru; Editing by
Subhranshu Sahu and Susan Fenton)
First Published: 2018-05-14 08:07:15
Updated 2018-05-14 12:34:56
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