Vodacom dividend lower than expected
Vodacom Group, Africa’s largest wireless carrier, declared a full-year dividend that missed estimates as start-up losses and currency pressures in its newest territories trimmed headline earnings.
The dividend for the year ended March 31 is R5.90 per share, down from R6.70 the previous year, Vodacom said in a statement on Monday.
The payout compares with an average estimate of R6.35 by analysts in a Bloomberg survey.
While the group increased revenue by 26% to R150.6 billion, net income declined 2.8% to R16.3 billion.
A combination of start-up losses in Ethiopia, higher finance and energy costs and weaker exchange rates across markets including Egypt contributed to a 10.8% decline in headline earnings, chief executive officer Shameel Joosub said.
Still, the group expects efforts to diversify its footprint and product mix will unlock strong returns over the medium term, he said.
Vodacom remains committed to spending 13% to 14.5% of overall revenue on capital expenditure, Joosub said.
“We will also seek to expand our partnerships across Africa to power Vodacom’s growth, drive infrastructure sharing to increase rural and fiber connectivity,” he said.
Africa is home to the worlds fastest-growing population and carriers are seeing young, and increasingly tech savvy, users engage more with their smartphones and spend more time on the internet.
Last year, the company started using a new dividend policy at least 75% of headline earnings — down from 90% — as it seeks to preserve funds to invest in Egypt and Ethiopia.
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