By Loni Prinsloo.
Africa’s biggest phone company by market value Vodacom Group posted an 18% drop in first-half net income after currency devaluations in Egypt and Ethiopia proved a challenge.
Sales at Johannesburg-based Vodacom climbed to R73.5 billion in the six months through September, an increase of 1%, it said in a statement Monday. However, net income declined to R6.84 billion from R8.39 billion a year ago.
The biggest challenge for African wireless carriers has been currency devaluation. Vodacom struggled with that in Ethiopia, and experienced a drop in the Egyptian pound during its reporting period, while its cross-town rival MTN Group has seen its profits wiped out by the devaluation of the naira in Nigeria.
“While we remain mindful of an evolving macro-economic environment across our footprint, including foreign-exchange rate risk, I believe that the group is well positioned to capitalise on opportunities once the global economy shifts from its current cautious optimism to sustainable growth,” chief executive officer Shameel Joosub said.
Vodacom cut its interim dividend by 7% to R2.85 per share.
Joosub also addressed the Competition Tribunal’s recent decision to prohibit Vodacom’s investment in Vumatel and DFA-owner Maziv at the end of October.
He said the transaction was designed to assist Maziv in growing its fibre footprint into lower-income areas and would have been highly beneficial for South Africa.
“We await the Competition Tribunal’s detailed reasons for prohibiting the transaction before considering all options available to Vodacom, which may include an appeal in the Competition Appeal Court,” he said.