Vodacom Group expects its headline earnings per share to rise by as much as 25%, the JSE-listed telecommunications group said on Wednesday, bolstered by a strong operating performance in spite of fierce price competition in South Africa, its biggest market.
The group’s earnings have also been lifted by a number of one-off financial events, it told shareholders.
Vodacom, which expects to publish its annual results for the year ended 31 March 2013 in four weeks’ time, said both headline and basic earnings have been impacted favourably by a “strong underlying core operating performance” as well as the replacement of secondary tax on companies with the dividend withholding tax. The tax expense in the prior year included a secondary tax charge of R806m.
“The tax charge in the current year was also favourably impacted by the recognition of an additional deferred tax asset in Mozambique, compared to the net derecognition of deferred tax assets in the prior year,” Vodacom said.
“Shareholders are reminded that basic earnings per share in the prior year were affected by impairment charges of R199m in relation to Gateway. The group concluded the disposal of Gateway Carrier Services on 31 August 2012, with the profit on disposal of US$30m having a favourable impact on earnings per share for the period.”
Vodacom said basic earnings per share for the full year would be between 25% and 30% higher, while the headline number would rise by between 20% and 25%.
Vodacom’s share price is trading down by 1,8% year on year after a strong performance in 2012. Since it peaked on 4 January, the counter has lost 19% of its value. Rival MTN has fallen by 12% since its 2013 peak. — (c) 2013 NewsCentral Media