Moving and shaking
WHILE SOME international markets are still rough for Vodacom, the group has made headway back home in South Africa with network upgrades, tariff changes and the introduction of new services. Results are due for the year to end-March and there’s some light at the end of the tunnel for Vodacom as it puts some harsh accounting requirements behind it.
SA’s largest cellular network (by subscribers) has also benefited from dark days at its chief rival, MTN South Africa, which has been plagued by billing problems of late and, by all accounts, is haemorrhaging disgruntled contract subscribers.
When the group announces its results it will produce earnings per share impacted by an impairment charge related to the acquisition of pan-African telecoms company Gateway that Vodacom bought in 2008 for US$700m. The R3,2bn charge due to overpayment for Gateway was raised by Vodacom in its first half 2010 and will impact on net profit in the group’s results.
Nevertheless, headline earnings per share for the year are expected to be between 20% and 25% higher, against 417c for the previous year, thanks to a black empowerment charge that was accounted for in 2009, boosting earnings in 2010. The market reacted to that announcement and its share price enjoyed a climb over the subsequent week and is currently sitting at around R55,75/share compared with R54,10 in mid-April.